Cnbc: Fourth-quarter U.S. GDP Up Just 1.4%, Inflation Firms at 3% After Long Shutdown

The latest advance estimate shows real gross domestic product increased 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 prolonged government shutdown tightened late-year activity. The cnbc keyword frames the day’s headlines: growth slowed while inflation measures held near the 3 percent mark, with the advance data flagged as preliminary and subject to revision.

Cnbc: What the advance estimate reveals about Q4 growth

The advance estimate put fourth-quarter real GDP growth at a 1. 4 percent annual rate, down from a 4. 4 percent rate in the third quarter. The deceleration reflected a mix of shifting components: consumer spending and investment rose and contributed positively, while declines in government spending and exports worked in the opposite direction. Imports fell, which mechanically subtracts less from GDP and thus partially offset other downward pressures.

Officials noted the quarter was affected by the longest government shutdown on record. That shutdown likely reduced growth by about one percentage point in the fourth quarter, a drag expected to be temporary because affected workers received back pay and some economic activity will shift into early 2026. The advance nature of the numbers means the estimate will be revised at least twice in the coming months.

Inflation, annual growth and what remained resilient

Inflation measures in the advance release showed consumer prices and core spending indicators firming near the 3 percent level. The personal consumption expenditures price index increased 2. 9 percent in the fourth quarter, while a broader price index for gross domestic purchases rose 3. 7 percent in the same period. Separately, consumer price measures showed a year-over-year increase of 2. 9 percent for December.

For the full year, real GDP increased 2. 2 percent in 2025. That annual gain was driven primarily by increases in consumer spending and investment, even as job growth and some key sectors weakened late in the year. Real final sales to private domestic purchasers—essentially the sum of consumer spending and private fixed investment—advanced in the fourth quarter, though at a slower pace than in the prior quarter.

Implications, near-term outlook and market context

The combination of a pronounced third-quarter rebound and a much softer fourth quarter produced a messy finish to the year. The shutdown’s one-percentage-point drag means some lost activity may reappear in early 2026 as paybacks and delayed purchases are recorded, implying a near-term rebound in measured growth. At the same time, the firming of inflation metrics will keep attention on price trends even as headline growth softens.

Investors and policymakers will focus on upcoming revisions and the next detailed releases, which will provide a clearer picture of sector-by-sector contributions. The advance estimate was rescheduled from its original release date because of the shutdown; further updates are scheduled as part of the standard revision process, with the next major update set for mid-March 2026.

• Advance Q4 real GDP: 1. 4 percent annual rate.
• Q3 real GDP (comparison): 4. 4 percent annual rate.
• Full-year 2025 real GDP change: 2. 2 percent.
• PCE price index, Q4: 2. 9 percent; broader purchases price index, Q4: 3. 7 percent.
• Shutdown impact: estimated drag of roughly one percentage point in Q4; effect characterized as temporary with partial rebound expected in early 2026.

Coverage and commentary will evolve as revisions arrive and more detailed data become available. For now, the advance estimate draws a clear line between underlying private-sector resilience in spending and investment and the short-term disruption tied to the prolonged shutdown.

Note: the figures presented here are from the official advance estimate and are preliminary; they will be revised in subsequent releases.