GDP growth revised down to 0.7% for Q4 2025 as U.S. economy slowed
The U.S. economy grew at an annual rate of 0.7% in the fourth quarter of 2025, according to a revised estimate from the Bureau of Economic Analysis – a downward revision of 0.7 percentage points from the agency’s previous reading.
The revised figure is well below the consensus forecast of 1.5% and marks a sharp deceleration from the 4.4% pace recorded in the third quarter, according to CNBC. Growth for the whole of 2025 came in at 2.1%, down 0.1 percentage points from the previous estimate and below the 2.8% pace recorded in 2024.
The BEA said the revision reflected downward adjustments in exports, consumer spending, government spending and investments. Imports fell less than previously expected, which also weighed on the overall figure, as a smaller drop in imports gives less mathematical effect to GDP. The downward revision in consumer spending was largely driven by health care services, based on new Census Bureau data. The export revision reflects updated intellectual property royalty figures.
The second estimate was delayed from its originally scheduled release date of February 26 due to the government shutdown last fall.
Regarding inflation, the BEA’s gross domestic purchases price index for the fourth quarter increased by 3.8%, revised slightly upwards from the previous estimate. The Personal Consumption Expenditures Price Index – the Federal Reserve’s preferred inflation gauge – rose 2.9% in the quarter, unchanged from the previous estimate. Core PCE, which excludes food and energy, rose 2.7%, also unchanged.
The GDP report covers a period before two significant economic events: the Supreme Court ruling that reversed part of President Donald Trump’s tariffs and the U.S.-Israeli war with Iran in early March, which sent energy prices soaring. The data therefore reflect neither the easing of the tariff decision nor the inflationary pressure of the oil shock which followed.
