U.S. GDP revised to 0.7% in fourth quarter
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Washington. The Commerce Department reported Friday that U.S. gross domestic product grew at a 0.7% annual rate in the fourth quarter, revising down its initial 1.4% estimate. The agency reported a 16.7% plunge in federal spending tied to last fall’s 43-day government shutdown, which subtracted about 1.16 percentage points from growth. Consumer spending slowed to a 2% pace while business investment excluding housing rose 2.2%. For 2025, GDP expanded 2.1%. Officials said the figures derive from the agency’s second estimate, monthly employment reports and energy-price data. Based on 6 articles reviewed and supporting research.
Prepared by Christopher Adams and reviewed by editorial team.
Timeline of Events
- Last fall: a 43-day federal government shutdown reduced federal spending and operations.
- Early reporting: Commerce Department released an initial Q4 GDP estimate of 1.4%.
- Second estimate: Commerce Department revised Q4 GDP growth down to 0.7%, citing lower federal outlays.
- February: payroll data showed a roughly 92,000 job decline and unemployment rising to 4.4%.
- Concurrently: tensions with Iran pushed oil prices up, affecting energy costs and inflation expectations.
News Intelligence
- A slower GDP growth rate can impact your wallet. It may mean fewer jobs and lower wage growth. If you're job hunting or hoping for a raise, keep an eye on these numbers. And remember, higher oil prices can mean higher costs at the gas pump and grocery store.
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Energy exporters and defense contractors experienced increased demand from higher oil prices and geopolitical spending, while firms investing in artificial intelligence continued to attract business investment.
American consumers and some federal programs faced slower growth, higher pump prices, weaker consumer spending, and reduced federal outlays that subtracted from GDP.
Coverage of Story:
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US economy grew much more slowly than previously reported in fourth quarter
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U.S. GDP revised to 0.7% in fourth quarter
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