The economy's fourth-quarter growth fell short of expectations

"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."

""The contributors to the increase in real GDP in the fourth quarter were increases in consumer spending and investment," the Bureau of Economic Analysis said. "These movements were partly offset by decreases in government spending and exports." 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."

U.S. real GDP rose 1.4% annualized in the fourth quarter of 2025, below the 2.8% forecast and down from 4.4% in the third quarter. Consumer spending and investment were the main contributors to growth, while decreases in government spending and exports partly offset gains. The job market weakened through 2025, adding the fewest jobs in over two decades outside recessions, but began 2026 with lower unemployment and stronger-than-expected job gains. Inflation moved closer to the Federal Reserve's 2% target, with the consumer price index up 2.4% year over year in January. Retail and food services sales were roughly flat in December month over month but better year over year.

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