Overview
- The Commerce Department reported real GDP grew at a 1.4% annualized pace in October–December 2025, below market expectations near 2.5–3.0%.
- Growth cooled sharply from the prior quarter’s 4.4% rate, marking a clear downshift to end the year.
- Personal consumption rose 2.4%, slower than 3.5% in Q3, while business equipment investment increased 3.7%, up from 3.2%.
- For 2025 as a whole, real GDP expanded 2.2% year over year, with reports noting Federal Reserve rate cuts supported overall growth.
- Analysts expect some rebound in the first quarter of 2026 as the shutdown’s temporary effects fade.