What happened
The US economy grew at an annualised rate of just 0.7% in the fourth quarter of 2025, the Bureau of Economic Analysis confirmed in its third and final estimate released on 9 April. The figure is unchanged from the second estimate but half the 1.4% reported in the initial advance reading.
Downward revisions hit multiple categories: consumer spending, exports, government expenditure, and business investment all came in weaker than first projected. Imports declined less than previously estimated, further dragging the headline number.
Why it matters
The final Q4 figure caps the weakest quarter of growth since the economy contracted in early 2022. Full-year 2025 GDP came in at 2.1%, revised down 0.1 percentage points. The BEA noted that a 43-day partial government shutdown in the autumn weighed on activity, though it could not isolate the precise impact.
The data provides a baseline for measuring the economic disruption caused by the US-Iran conflict. Oil prices spiked above $115 per barrel in late March before collapsing 15% on ceasefire news this week, creating whiplash for consumer and business confidence.
The new release format
For the first time, the BEA bundled national, industry, and state-level GDP data into a single release. The agency also discontinued PDF and Excel release tables, directing users to its online interactive data platform instead.
Context
The Federal Reserve has held interest rates steady through the first quarter of 2026, citing uncertainty from geopolitical shocks and volatile energy prices. Markets have pulled forward rate-cut expectations following the ceasefire, but weak GDP data may add pressure for the Fed to act sooner.