US Q4 2025 GDP Revised to 0.7% Annual Rate

The U.S. Commerce Department reported Friday that the economy grew at a sluggish 0.7 percent annualized rate in the fourth quarter of 2025, a significant downgrade from its initial estimate of 1.4 percent and well below economists' expectations for an upward revision. The period, covering October through December, marked a sharp slowdown from the 4.4 percent growth in the third quarter and 3.8 percent in the second, largely due to the effects of a 43-day government shutdown that occurred the previous fall.

The revision highlighted weaknesses across several key areas of gross domestic product, the broadest measure of the nation's output of goods and services. Federal government spending and investment plummeted at a 16.7 percent rate, subtracting 1.16 percentage points from overall growth, as the shutdown disrupted operations and delayed expenditures. Consumer spending, which drives about two-thirds of economic activity, rose at a 2 percent pace, down from 3.5 percent in the third quarter and the government's earlier projection of 2.4 percent. Business investment in non-housing sectors increased at a solid 2.2 percent rate, potentially boosted by investments in artificial...