US economy grows 0.5% in last quarter of 2025, below estimates

Mucahithan Avcioglu

The US economy grew at a slower pace than previously estimated in the final quarter of 2025, as weaker investment offset solid consumer spending, according to the third estimate released Thursday by the Bureau of Economic Analysis (BEA).

Real gross domestic product (GDP) rose at an annual rate of 0.5% in the fourth quarter of 2025, down from 4.4% growth in the previous quarter and 0.2 percentage points lower than the second estimate, the BEA said.

The agency said the downward revision mainly reflected a weaker reading on investment.

Consumer spending and investment contributed to GDP growth in October-December, while declines in government spending and exports partly offset the increase. Imports, which subtract from GDP, fell during the quarter.

From an industry perspective, real value added for private services-producing industries rose 2.3%, helping lift overall output, while government activity fell 7.8% and private goods-producing industries declined 1.8%.

The leading contributors to fourth-quarter growth were wholesale trade, information, and health care and social assistance, according to the report.

The agency also said real final sales to private domestic purchasers, a measure combining consumer spending and gross private fixed investment, climbed 1.8% in the fourth quarter, slightly below the previous estimate.

Real gross domestic income (GDI) rose 2.6% in the quarter, slowing from a 3.5% gain in the third quarter, while the average of real GDP and real GDI gained 1.5%, down from 4% in the prior quarter.