The U.S. economy saw a marked slowdown at the end of 2025, recording quarterly growth of just 0.1%, according to revised figures released this Thursday by the Bureau of Economic Analysis (BEA). On an annualized basis, growth was 0.5%, falling significantly short of analyst expectations, which had projected an increase closer to 3%.
The annual report confirmed that U.S. GDP grew by 2.1% throughout 2025. This figure represents a cooling compared to the 2.8% increase recorded in 2024. The data, the release of which was delayed due to the federal government shutdown between October and November, reflects a less dynamic environment across key sectors.
Factors behind the slowdown
The BEA report details that investment was one of the primary drags, with growth revised downward to 2.3%—a full percentage point lower than initially estimated. At the same time, consumer spending contracted by a tenth of a percentage point, settling at 1.9%.
The public sector also contributed to the stagnation. Government spending suffered a 5.6% decline, while federal spending specifically fell by 16.6%. In the defense sector, spending maintained a negative trend with a 10.7% reduction during the final quarter of the year.
Foreign trade showed additional weakness. Exports recorded a 3.2% drop, deepening the decline compared to previous estimates. Meanwhile, imports decreased by 1%, a minor adjustment that failed to offset the lack of traction in domestic demand.
These figures arrive at a critical moment for the Federal Reserve. The U.S. central bank will evaluate this economic performance at its April 28-29 meeting, which could mark the end of Jerome Powell's tenure at the helm of the institution. The Fed now faces the challenge of calibrating its monetary policy in the face of growth that is rapidly losing momentum.
