U.S. GDP Growth Revised Down to 0.7% in Q4 2025

The Commerce Department reported weaker-than-expected economic activity amid an "energy crunch" and conflict in Iran.

Mar. 13, 2026 at 5:06pm

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The U.S. gross domestic product rose at an inflation-adjusted rate of 0.7% in the fourth quarter of 2025, the Commerce Department reported on Friday. This revised figure was about half the 1.4% growth originally expected, marking a significant slowdown from the 4.4% growth recorded in the third quarter. Increases in consumer spending and investment were offset by decreases in government spending and exports, contributing to the weakened GDP.

Why it matters

The downward revision in GDP growth is seen as a "gut check" for the economy as the U.S. faces an "energy crunch" amid conflict in Iran, a major global oil producer. The weaker-than-expected data also suggests the economy entered this crisis in a more vulnerable state, posing challenges for policymakers and investors as inflation remains elevated.

The details

The 0.7% GDP growth in Q4 2025 was a marked departure from the 4.4% growth recorded in the previous quarter. For the full year, there was a 2.1% increase in GDP, down from 2.8% in 2024. The Bureau of Economic Analysis cited increases in consumer spending and investment as contributing factors, along with decreases in government spending and exports.

  • The GDP data was reported on Friday, March 13, 2026.
  • The fourth quarter of 2025 spanned the months of October, November, and December.

The players

Commerce Department

The U.S. government agency that reported the revised GDP figures.

Bureau of Economic Analysis

The division within the Commerce Department that compiles and analyzes the GDP data.

David Russell

The global head of market strategy at TradeStation who commented on the GDP revision.

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What they’re saying

“The soft January durable goods data also suggests the economy entered this crisis weaker than hoped. This creates challenges for investors with PCE inflation still running well above the [Federal Reserve's] target.”

— David Russell, Global Head of Market Strategy, TradeStation

The takeaway

The downward revision in Q4 2025 GDP growth highlights the fragility of the U.S. economy as it faces headwinds from an "energy crunch" and elevated inflation, underscoring the challenges policymakers and investors will need to navigate in the months ahead.