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.
More context
Timeline
- 1. Last fall: a 43-day federal government shutdown reduced federal spending and operations.
- 2. Early reporting: Commerce Department released an initial Q4 GDP estimate of 1.4%.
- 3. Second estimate: Commerce Department revised Q4 GDP growth down to 0.7%, citing lower federal outlays.
- 4. February: payroll data showed a roughly 92,000 job decline and unemployment rising to 4.4%.
- 5. Concurrently: tensions with Iran pushed oil prices up, affecting energy costs and inflation expectations.
Why it matters
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.
Sources
JQJO Editorial Desk · Human reviewed · AI assisted. Report a correction.
