Cnbc: Fourth-quarter U.S. GDP Up 1.4%, Inflation Firms Near 3%
The advance estimate shows real U. S. gross domestic product rose at a 1. 4 percent annual rate in the fourth quarter of 2025, a sharp deceleration from the prior quarter and a sign that the lengthy government shutdown weighed on end-of-year activity. The move matters now because the report is preliminary and will be revised at least twice, and it includes price measures that signaled firmer inflation as the year closed; cnbc outlets and market participants will be watching revisions and the next scheduled update.
Quarterly growth and contributors
The advance figure for the October–December period came in at a 1. 4 percent annualized pace, down from a 4. 4 percent increase in the third quarter. The published breakdown shows increases in consumer spending and investment contributed to the fourth-quarter gain, while decreases in government spending and exports partly offset those gains. Imports fell in the period; because imports are subtracted in the GDP calculation, the drop in imports had a net effect of boosting the headline pace.
Price indexes and inflation signals
Price measures tied to domestic purchases rose more quickly in the fourth quarter than in the third. The price index for gross domestic purchases increased 3. 7 percent in the quarter compared with a 3. 4 percent rise in the prior quarter. The personal consumption expenditures price index increased 2. 9 percent in the fourth quarter, with the core PCE measure excluding food and energy up 2. 7 percent. Separate monthly figures show consumer prices in December were up 2. 9 percent from a year earlier, the fastest year-over-year pace noted since earlier in the previous year. Measures for the full year show divergence in some annual comparisons.
Shutdown impact and near-term outlook
Officials estimated the prolonged government shutdown reduced fourth-quarter growth by about one percentage point. Furloughed public-sector employees later received back pay, and the assessment in the advance materials is that the missing paychecks will produce a temporary drag at year-end that should translate into a rebound in early 2026 as that income is restored. The report is an advance estimate and is scheduled for at least two subsequent revisions; the next update is set for March 13, 2026, at 8: 30 a. m. EDT.
Cnbc view: what to watch next
Key near-term indicators to monitor include revisions to the advance GDP estimate in the coming releases, updated readings on consumer spending and investment, and monthly price indexes that will clarify whether the late-quarter firming of inflation persists. Real final sales to private domestic purchasers, the sum of consumer spending and private fixed investment, rose 2. 4 percent in the fourth quarter versus a 2. 9 percent gain in the third quarter; that gauge will be watched for signals about demand strength. The report also flagged that annual real GDP rose 2. 2 percent for 2025 as measured from the prior annual level, and commentators will be parsing comparative year-over-year figures for context.
The advance nature of the data and the documented effect of the shutdown mean revisions could materially change the headline rate; the published materials note the figures will be updated in at least two future releases. For markets and policymakers, the combination of slower quarterly growth, a still-elevated price index, and the prospect of a partial technical rebound in early 2026 shapes the immediate agenda for incoming economic readings.
