Overview
- The second estimate lowered key components, with exports revised to a 3.3% decline, consumer spending to 2.0%, and investment to 3.3%.
- Federal outlays fell more than first reported, with total federal spending down 16.7% in the quarter and defense spending down 10.7%.
- The 43‑day federal shutdown was a major drag, and the Congressional Budget Office estimates it subtracted about 1.5 percentage points from fourth‑quarter GDP.
- The release was delayed by the shutdown, and the 0.7% annualized pace came in well below market expectations near 3%.
- Energy price pressures and firmer PCE inflation have prompted stagflation warnings from analysts, while futures pricing points to the Fed holding rates next week.