United States: Economic growth decelerates in the fourth quarter of 2025
GDP reading: The United States’ GDP increased 1.4% in seasonally adjusted quarter-on-quarter annualized (SAAR) terms in Q4, following 4.4% growth in the previous quarter. The Q4 reading was well below market expectations and the country’s own post-pandemic trend, with activity weighed on by the record-long government shutdown plus weaker net exports.
On a year-on-year basis, the economy increased 2.2% in Q4, following a 2.3% expansion in the previous quarter.
Private spending and investment remain solid, but government spending tumbles: Compared with the previous quarter’s data, figures in Q4 worsened for private consumption (+2.4% on a SAAR basis vs +3.5% in Q3), government consumption (-5.1% vs +2.2% in Q3) and exports of goods and services (-0.9% vs +9.6% in Q3). In contrast, readings strengthened for fixed investment (+2.6% vs +0.8% in Q3) and imports of goods and services (-1.3% vs -4.4% in Q3).
Panelist insight: On the data and outlook, ING’s James Knightley said:
“The reopened government is expected to boost GDP in first-quarter 2026, but the trade story seems to have normalised now, so it will tend to act as a mild drag. The underlying story appears to be holding up though, with the US set to record a sixth consecutive year of 2%+ GDP growth in 2026. However, the lack of breadth remains a concern. All other business investment [except tech-related capex] in the US has now fallen for FIVE consecutive quarters. It may be that companies are so focused on staying ahead of the curve on technology that they are allowing technology capex to cannibalise all other business investment and hiring. Nonetheless, this suggests a certain degree of concentration risk to the growth story […]. The same is true of the US consumer sector. The top 20% of households by income continue to spend strongly, boosted by high incomes and soaring wealth, while the bottom 60% are struggling as concerns about job security and the potential for tariff-induced price hikes sap sentiment.”