US Q4 GDP Growth Cut In Half To Just 0.7% After Revision

While it’s useless most of the time, and especially so when the US has just entered war throwing a wrench into the entire economic calculus, moments ago the BEA reported that Q4 GDP in the US was slashed by half after the 1st revision of data: instead of 1.4%, the US grew just 0.7% in the last quarter of 2025 (0.660% to be precise), and far below estimates of a 1.4% print. It was also the lowest GDP print since Q1 2025. 

According to the BEA, GDP was revised down 0.7% point from the advance estimate, or exactly half, reflecting downward revisions to exports, consumer spending, government spending, and investment. Specifically, the revisions were as follows

Personal consumption was slashed from 1.58% to 1.33% of the bottom line 0.7% print after the revision. 
Fixed Investment was also revised lower from 0.4% to just 0.29%.
The Change in private inventories was the only upward revision, from 0.21% to 0.28%
Net trade (exports less imports) was also revised lower, from 0.08% to -0.21%.
Government’s contribution to GDP – which in Q4 was deeply negative due to the longest govt shutdown on record – was also lower than initially expected, subtracting -1.03% from the bottom line print, as opposed to -0.90%.

Final sales to private domestic purchases, which excludes government, trade and inventories, grew at ​a 1.9% pace. ​This measure ⁠of domestic demand, closely watched by policymakers, was initially estimated to have ​increased at a 2.4% rate. Domestic ​demand grew ⁠at a 2.9% pace in the July-September quarter.

While a pick up in growth is expected this ⁠quarter, ​the U.S.-Israeli war with ​Iran, which has driven up oil prices, is clouding the economic ​outlook, with many expecting a GDP hit should the oil price surge persist.