The United States economy cooled significantly at the end of 2025, with the latest federal data showing real gross domestic product (GDP) grew at an annual rate of just 0.5 percent. This figure marks a sharp deceleration from the 4.4 percent growth recorded in the third quarter.
Updated figures from the Bureau of Economic Analysis (BEA), an agency within the Department of Commerce, show the latest expansion fell 0.2 percentage points below the second estimate. Officials attributed the downward revision primarily to lower-than-anticipated investment.
Weak investment slows output
Despite the cooling growth, the BEA noted that consumer spending and investment remained the primary drivers of the economy during the final three months of the year. These gains were partially offset by a contraction in both public spending and exports.
Imports, which are subtracted from the GDP calculation, also declined during the period. Real final sales to private domestic purchasers—a metric that combines consumer spending and private fixed investment—grew by 1.8 percent. This represents a 0.1 percentage point dip from previous estimates.
Real gross output decreased by 0.5 percent in the fourth quarter. The data highlights a 3.2 percent decline in private goods-producing industries and a 4.7 percent drop in the public sector. These losses were partially mitigated by a 1.1 percent increase in private service-producing industries.
The Gross Domestic Income (GDI), which serves as an alternative measure of economic output, rose by 2.6 percent in the fourth quarter compared to 3.5 percent in the previous quarter. When averaging GDP and GDI, the agency reported a 1.5 percent growth rate, down from 4.0 percent in the third quarter.
