Overview

Click to expand overview
WASHINGTON (AP)The U.S. economy expanded at a healthy annual 2.4% pace the final three months of 2025, supported by a year-end surge in consumer Commerce revised up its fourth-quarter GDP growth figure to a 2.4% annualized pace, from a previous estimate of 2.3%. That followed growth of 3.1% in the third Gross domestic productthe broadest measure of economic activityincreased at an annualized rate of 2.9% from October to December last year, according to Fourth-quarter gross domestic product, the sum of all goods and services produced for the last months of the year, rose at a 2.9% annualized pace, the Commerce The U.S. economy grew at a solid 2.9% annual rate last quarter but entered this year with less momentum as rising interest rates and still-high inflation weighed on Consumer spending – which accounts for about two-thirds of GDP – remained solid in the fourth quarter: It rose 2.1% for the period, a slight drop from the previous The initial estimate of fourth quarter U.S. GDP growth came in at 2.3% annualized, down from 3.1% in the third quarter. This was near our estimate of 2.2%, but

U.S. GDP Rises by 2.9% in Fourth Quarter: Key Takeaways and Analysis

The U.S. economy showed resilience in the final months of last year, with Gross domestic product – the broadest measure of economic activity – increasing at an annualized rate of 2.9% from October to December, according to preliminary data. Fourth-quarter gross domestic product, the sum of all goods and services produced for the last months of the year, rose at a 2.9% annualized pace, the Commerce Department reported. This solid growth highlights the economy's ability to navigate challenges, but what does it really mean?

Breaking Down the 2.9% GDP Growth

The headline figure of 2.9% represents the annualized rate of growth. This means that if the economy continued to grow at that pace for a full year, it would expand by 2.9%. While a positive sign, it's important to understand the underlying factors contributing to this growth.

Consumer Spending: Consumer spending – which accounts for about two-thirds of GDP – remained solid in the fourth quarter: It rose 2.1% for the period, a slight drop from the previous quarter. This sustained spending, driven by factors like holiday shopping and pent-up demand, was a major contributor to the overall GDP growth.

Revised Estimates: WASHINGTON (AP) The U.S. economy expanded at a healthy annual 2.4% pace the final three months of 2025, supported by a year-end surge in consumer spending. Commerce revised up its fourth-quarter GDP growth figure to a 2.4% annualized pace, from a previous estimate of 2.3%. That followed growth of 3.1% in the third quarter. It's crucial to note that GDP figures are often revised as more data becomes available, providing a more accurate picture of the economy's performance.

Context and Challenges Ahead

While the 2.9% GDP growth in the fourth quarter is encouraging, experts remain cautious about the economic outlook for the current year. The U.S. economy grew at a solid 2.9% annual rate last quarter but entered this year with less momentum as rising interest rates and still-high inflation weighed on economic activity. The initial estimate of fourth quarter U.S. GDP growth came in at 2.3% annualized, down from 3.1% in the third quarter. This was near our estimate of 2.2%, but these factors could dampen future growth.

Conclusion

The U.S. GDP's 2.9% rise in the fourth quarter demonstrates underlying economic strength, particularly driven by consumer spending. However, future economic performance will depend on navigating the headwinds of inflation and interest rate hikes. Stay tuned for further analysis as more economic data becomes available.

Top Sources

Related Articles