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- Real GDP rose at an annualized rate of 1.4% in the fourth quarter of 2025, below the 2.8% forecast.
- That’s short of the growth in the previous two quarters but better than the first quarter’s contraction.
- Other data releases showed the job market slowed in 2025, and retail sales were weak in December.
Economic growth slowed more than expected at the end of last year.
US real gross domestic product rose at an annualized rate of 1.4% in the fourth quarter, short of the 2.8% expected.
That’s also subpar compared to the 4.4% growth in the third quarter, which was propped up by robust consumer spending and exports. Still, it means the economy wrapped up the year with some strength in a year filled with uncertainty and many policy changes.
Other recent data releases showed how the economy ended 2025 and began 2026. The job market has been losing strength over the past few years, and in 2025, it added the fewest jobs in over two decades outside recessions. However, the job market had a good start to 2026, with unemployment cooling and more jobs added than expected.
Meanwhile, inflation has gotten closer to the Fed’s 2% target. The consumer price index, one inflation measure, rose 2.4% year over year in January, softer than the previous 2.7%. Advance estimates of retail and food services sales showed sales were pretty flat in December from November’s sales, but better than a year ago.
This is a developing story. Please check back for updates.