US economic growth decelerated markedly in the Q4 2025, with real GDP expanding at an annualized pace of 1.4%, well below expectations of 2.9%. The slowdown is significant compared with the 4.4% surge recorded in Q3.
Growth was supported by resilient consumer spending, particularly in services such as healthcare, alongside continued business investment. However, these gains were largely offset by sharp declines in federal government spending following the 43-day shutdown, as well as weaker exports.
On inflation, the PCE price index rose 2.9% in Q4, while core PCE increased 2.7%.
