US GDP Growth Revised Sharply Lower

2026-03-13 12:33 By Joana Taborda 1 min. read

The US economy expanded an annualized 0.7% in Q4 2025, the weakest performance since Q1 2025 and well below 1.4% in the advance estimate.

Consumer spending slowed more than anticipated (2% vs 2.4% in the advance estimate), as purchases of both goods (0.4%) and services (2.7%) cooled.

Fixed investment also increased less than expected (1.6% vs 2.6%), largely due to a sharper drop in structures (-7.1%) while investment in equipment (3.9%) and intellectual property products (5.7%) remained robust.

Residential investment nearly stabilized (-0.5%).

Exports declined at a faster pace of 3.3%, compared with the initial estimate of a 0.9% drop, marking the largest contraction since Q2 2023.

Imports also fell (-1.1% vs. -1.3%).

Meanwhile, government spending and investment contracted sharply (-5.8% vs -5.1%), subtracting 1.03 pp from overall growth, due to the government shutdown.

For 2025, the US economy expanded by 2.1%, slightly below the initial estimate of 2.2% and down from 2.8% in 2024.



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US GDP Growth Revised Sharply Lower
The US economy expanded an annualized 0.7% in Q4 2025, the weakest performance since Q1 2025 and well below 1.4% in the advance estimate. Consumer spending slowed more than anticipated (2% vs 2.4% in the advance estimate), as purchases of both goods (0.4%) and services (2.7%) cooled. Fixed investment also increased less than expected (1.6% vs 2.6%), largely due to a sharper drop in structures (-7.1%) while investment in equipment (3.9%) and intellectual property products (5.7%) remained robust. Residential investment nearly stabilized (-0.5%). Exports declined at a faster pace of 3.3%, compared with the initial estimate of a 0.9% drop, marking the largest contraction since Q2 2023. Imports also fell (-1.1% vs. -1.3%). Meanwhile, government spending and investment contracted sharply (-5.8% vs -5.1%), subtracting 1.03 pp from overall growth, due to the government shutdown. For 2025, the US economy expanded by 2.1%, slightly below the initial estimate of 2.2% and down from 2.8% in 2024.
2026-03-13
US GDP Growth Well Below Forecasts
The US economy expanded an annualized 1.4% in Q4 2025, the least since Q1 2025, following a 4.4% growth in Q3 and well below forecasts of 3%, the advance estimate showed. Consumer spending slowed (2.4% vs 3.5%), weighed down by a 0.1% decline in goods purchases, while services spending rose 3.4%. Meanwhile, exports fell 0.9% after surging 9.6% in Q3, and imports also declined, though at a slower pace (-1.3% vs -4.4%). Government spending and investment contracted sharply by 5.1% (vs 2.2%), subtracting 0.9 pp from overall growth, due to the government shutdown. On the other hand, fixed investment accelerated (2.6% vs 0.8%), driven by strong gains in intellectual property products (7.4% vs 5.6%) and equipment (3.2% vs 5.2%), as well as a more moderate decline in structures (-2.4% vs -5.0%). The drop in residential investment also eased (-1.5% vs -7.1%). Considering full 2025, the US economy expanded 2.2%, below 2.8% in 2024, reflecting increases in consumer spending and investment.
2026-02-20
US Economy Expected to Grow 3% in Q4
The US economy is expected to have grown at an annualized rate of 3.0% in Q4 2025, slowing from 4.4% in the previous quarter. According to the Atlanta Fed's GDPNow, consumer spending is anticipated to remain solid, supported by health care expenditures and gains in asset markets, though likely moderating to 2.5% from 3.5% in Q3. Investment in non-residential structures and residential construction is expected to stay subdued, while equipment investment may continue to expand, boosted by the ongoing AI boom. Inventories are projected to be largely unchanged in Q4, which would provide a positive contribution to GDP following sharp inventory declines in both Q2 and Q3. Government spending is expected to slow, with state and local expenditures showing moderate growth, while federal outlays are likely to decline following the longest government shutdown on record. On the external front, both exports and imports are forecast to rise modestly, contributing slightly to overall GDP growth.
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