U.S. economic expansion cooled significantly in the final quarter of 2025, coming in well below market expectations, according to fresh data from the Commerce Department.
Gross domestic product grew at an annualized rate of 1.4% in the fourth quarter, a steep drop from the 4.4% surge recorded in the third quarter. Economists had projected growth of 2.8%.
While consumer spending and business investment continued to provide support, those gains were partially offset by declines in government outlays and exports.
The sharper-than-anticipated slowdown largely reflected pullbacks in public sector spending and overseas demand, alongside a moderation in the pace of consumer activity compared with the prior quarter.