SP
BravenNow
Fourth-quarter U.S. GDP up just 1.4%, badly missing estimate
| USA | general | ✓ Verified - cnbc.com

Fourth-quarter U.S. GDP up just 1.4%, badly missing estimate

#GDP growth #Federal Reserve #Inflation #PCE index #Interest rates #Economic slowdown #Q4 2025

📌 Key Takeaways

  • U.S. GDP grew at 1.4% annualized rate in Q4 2025, missing 2.5% expectation
  • Core PCE inflation remained at 3% in December, above Fed's 2% target
  • Both GDP and inflation data complicate Federal Reserve's interest rate decisions
  • Economic growth is slowing while inflation remains persistent

📖 Full Retelling

The Commerce Department reported that the U.S. economy grew at an annualized rate of just 1.4% in the fourth quarter of 2025, significantly below economists' expectations of 2.5%, while the Federal Reserve's preferred inflation gauge showed prices rising 3% annually in December, complicating the central bank's interest rate decisions amid persistent inflation above its 2% target. The disappointing GDP figures, adjusted for seasonality and inflation, indicate a notable cooling of economic activity as the year ended, despite earlier quarters showing stronger performance. This slowdown comes as the Federal Reserve continues to navigate the challenging task of taming inflation without triggering a more severe economic downturn. The data released Friday presents a complex picture for policymakers who must balance concerns about persistent price increases with signs of moderating economic momentum. The combination of weaker-than-expected growth and inflation remaining well above target creates a difficult scenario for monetary policy decisions in the coming months.

🏷️ Themes

Economic Growth, Monetary Policy, Inflation

📚 Related People & Topics

Inflation

Inflation

Devaluation of money's purchasing power

In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation...

View Profile → Wikipedia ↗
Economic growth

Economic growth

Measure of increase in market value of goods

In economics, economic growth is an increase in the quantity and quality of the economic goods and services that a society produces. It can be measured as the increase in the inflation-adjusted output of an economy in a given year or over a period of time. The rate of growth is typically calculated ...

View Profile → Wikipedia ↗
Federal Reserve

Federal Reserve

Central banking system of the US

The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to th...

View Profile → Wikipedia ↗

Interest rate

Percentage of a sum of money charged for its use

An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed. Interest rate periods are ordinarily a year and are often annualized when not. Alongside interest rates, three other variables determine total interest: principal sum, compounding f...

View Profile → Wikipedia ↗

Entity Intersection Graph

Connections for Inflation:

🌐 Interest rate 15 shared
🌐 Monetary policy 12 shared
👤 State of the Union 12 shared
👤 Donald Trump 10 shared
🌐 Economy 8 shared
View full profile

Mentioned Entities

Inflation

Inflation

Devaluation of money's purchasing power

 Economic growth

Economic growth

Measure of increase in market value of goods

 Federal Reserve

Federal Reserve

Central banking system of the US

Interest rate

Percentage of a sum of money charged for its use
}
Original Source
Economic growth cooled near the end of 2025 while inflation held firm, according to data released Friday that could complicate the Federal Reserve's interest rate path. Gross domestic produce rose at an annualized rate of just 1.4%, according to Commerce Department numbers adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for a 2.5% gain. At the same time, inflation held firm in December, according to the gauge most closely watched by Fed officials. The core personal consumption expenditures price index, which excludes food and energy, rose 3% in December, according to a separate release. That matched the consensus forecast but kept the pivotal inflation measure well above the Fed's 2% target. On a headline basis, the PCE index accelerated 2.9%, or 0.1 percentage point higher than expected. Both indexes rose 0.4% for the month, compared to the respective forecasts for 0.3%. This is breaking news. Please refresh for updates . Subscribe to CNBC PRO Subscribe to Investing Club Licensing & Reprints CNBC Councils Select Personal Finance Join the CNBC Panel Closed Captioning Digital Products News Releases Internships Corrections About CNBC Site Map Podcasts Careers Help Contact News Tips Got a confidential news tip? We want to hear from you. Get In Touch CNBC Newsletters Sign up for free newsletters and get more CNBC delivered to your inbox Sign Up Now Get this delivered to your inbox, and more info about our products and services. Advertise With Us Please Contact Us Ad Choices Privacy Policy Your Privacy Choices CA Notice Terms of Service © 2026 Versant Media, LLC. All Rights Reserved. A Versant Media Company. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Market Data Terms of Use and Disclaimers Data also provided by
Read full article at source

Source

cnbc.com

More from USA

News from Other Countries

🇬🇧 United Kingdom

🇺🇦 Ukraine