Overview
- The economy expanded 2.2% in 2025, down from 2.8% in 2024, after a Q3 pace of 4.4% gave way to a softer year‑end.
- BEA estimates the record shutdown subtracted about 1 percentage point from fourth‑quarter growth, with much of the lost activity likely to be recouped later.
- Consumer spending slowed to a 2.4% annualized gain from 3.5% in Q3, federal outlays plunged, and exports declined.
- Inflation stayed above the Fed’s target, with headline PCE up 2.9% year over year in December and core at about 3.0%, as both indexes rose 0.4% on the month.
- The advance reading missed forecasts near 2.5%–3.0% and will be revised twice before a final April figure, while AI‑related investment remains a notable support to growth.