The economy slowed in the last 3 months of the year but was still solid in 2025

"The U.S. economy slowed in the final months of last year, but it continued to expand, thanks to robust consumer spending and business investment in artificial intelligence. A report from the Commerce Department Friday shows the economy grew at an annual rate of 1.4% in October, November and December. That compares to a 4.4% pace the previous quarter. For all of 2025, the nation's gross domestic product grew 2.2%, following 2.4% growth in 2024."

""The consumer drives the economic train," says Mark Zandi, chief economist at Moody's Analytics. Spending was propped up in part by wealthy Americans who have been been cheered by the rising value of their homes and stock portfolios. "The well-to-do, they're doing great and they're out spending," Zandi says. "Folks in the bottom and middle of the income distribution, not so much.""

U.S. GDP expanded at a 1.4% annual rate in October–December, down from a 4.4% pace the prior quarter. Annual GDP rose 2.2% in 2025 after 2.4% growth in 2024. Personal spending, the largest economic driver, increased 2.4% annualized in the fourth quarter and was supported by wealthier households benefiting from higher home and stock values. Lower- and middle-income households showed more caution, and retailers serving them reported weaker demand. Credit card balances climbed to $1.15 trillion, up $39 billion year-over-year. Hiring slowed sharply, with only 181,000 jobs added in 2025, raising concerns about future consumer caution.

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