Commerce Department downgrades US Q4 GDP growth to 0.5%
AP News • • business
Key Points:
- The U.S. economy grew at a sluggish 0.5% annual pace in the fourth quarter, a downgrade from the previous estimate of 0.7%, largely due to the 43-day government shutdown last fall.
- Federal government spending and investment fell sharply by 16.6%, reducing fourth-quarter GDP growth by 1.16 percentage points, while consumer spending growth slowed to 1.9%.
- Overall economic growth for 2025 was 2.1%, down from 2.8% in 2024 and 2.9% in 2023, indicating a deceleration in economic momentum.
- Business investment outside of housing rose 2.4%, likely driven by artificial intelligence investments, but this was a slowdown from the previous quarter’s 3.2% increase.
- The economic outlook for 2026 remains uncertain due to the U.S.-Israeli war with Iran impacting energy prices and global trade, while the job market has shown volatility with fluctuating monthly employment figures.
