Cnbc: Fourth-quarter U.S. GDP Up 1.4%, Inflation Measures Firm in Fourth Quarter
cnbc coverage: The advance estimate for fourth-quarter 2025 shows real gross domestic product rose at a 1. 4 percent annual rate, a sharp slowdown from the 4. 4 percent increase in the prior quarter. The print matters now because the deceleration coincided with a prolonged government shutdown and stronger measures of inflation in the quarter.
Cnbc framing: Q4 numbers
The advance estimate put fourth-quarter real GDP growth at a 1. 4 percent annual rate, down from 4. 4 percent in the third quarter. The quarter's increase reflected gains in consumer spending and investment that were partly offset by declines in government spending and exports; imports, which subtract from GDP, decreased over the quarter. Real final sales to private domestic purchasers—broadly the sum of consumer spending and business investment—rose 2. 4 percent in the fourth quarter, compared with a 2. 9 percent gain in the third quarter.
Government shutdown and near-term outlook
The quarter was affected by the 43-day government shutdown. The Commerce Department estimated the shutdown reduced fourth-quarter growth by about one percentage point. That effect is described as temporary: furloughed workers later received back pay, and based on the same estimate growth is expected to rebound by a similar amount in early 2026. The advance numbers are preliminary and will be revised at least twice in the coming months; the next formal update is scheduled for March 13, 2026, at 8: 30 a. m. EDT.
Inflation and price indexes
Price measures rose in the quarter. The price index for gross domestic purchases increased 3. 7 percent in the fourth quarter, up from a 3. 4 percent increase in the third quarter. The personal consumption expenditures price index—the broad inflation gauge tied to consumption—increased 2. 9 percent in the quarter, compared with a 2. 8 percent increase in the prior quarter; excluding food and energy, the PCE price index rose 2. 7 percent in the fourth quarter versus 2. 9 percent in the third quarter. Separate monthly data showed consumer prices rose 2. 9 percent in December from a year earlier, the fastest year-over-year pace since March 2024.
Annual picture and what to watch
On an annual basis, real GDP increased 2. 2 percent in 2025, compared with a larger increase in 2024. The pickup in consumer spending and investment helped sustain growth for the year despite the fourth-quarter slowdown. Key indicators to watch in coming releases include revisions to the advance GDP estimate, updates on government payroll activity tied to the shutdown back-pay effect, and upcoming monthly price data that will clarify whether the recent firming in inflation persists. cnbc readers should note that the advance estimate is an initial snapshot and that second and third estimates will refine the picture.
