| Consensus | Consensus Range | Actual | Previous | Revised | |
| Quarter over Quarter [Adjusted] | 0.2% | 0.1% to 0.3% | 0.1% | -0.5% | -0.4% |
| Year over Year [Not Adjusted] | 0.7% | 0.5% | 0.6% |
Highlights
The economy eked out a 0.1 percent gain in the fourth quarter on a seasonally adjusted basis, after a 0.4 percent contraction in the third quarter, while expanding 0.7 percent year-on-year, according to final results. The quarterly result, is lower than the median of an Econoday survey of economists' forecasts.
Among the major economic sectors, manufacturing was flat during the fourth quarter, but this comes after a decline of 2.9 percent in the third quarter and a 0.8 percent drop in the second. This represents a degree of stabilization after the economy was whipsawed by the US trade policy. Encouragingly, the pharmaceutical and chemical industries grew by 1.9 percent in the final three months of the year.
Household consumption rose 0.4 percent in the fourth quarter, matching the grown in the third, while the government spent 0.1 percent less.
Trade was up 1.7 percent in the fourth quarter as goods exports rose 0.6 percent after a 2.5 percent decline in the third. Imports of goods rose 4.8 percent in after a more modest 0.8 percent increase the previous quarter. Both exports and imports exclude valuables.
The economy expanded 1.3 percent in 2025, a marginal slowdown from the 1.4 percent increase in 2024.
The key takeaway is that the economy stabilized during the fourth quarter after tumultuous second and third quarter results. The US tariff situation remains murky, and the government is likely to want further clarity before proceeding with the agreement reached last year.
Market Consensus Before Announcement
GDP expected up 0.2 percent on quarter.
Definition
Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. There is no flash estimate and the first report is typically not issued until around sixty days after the end of the reference quarter. This has the advantage of limiting the size of any future revision and also accommodates the inclusion of the GDP expenditure components.
Description
GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Investors in the stock market like to see healthy economic growth because robust business activity translates to higher corporate profits. Bond investors are more highly sensitive to inflation and robust economic activity could potentially pave the road to inflation. By tracking economic data such as GDP, investors will know what the economic backdrop is for these markets and their portfolios.
The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.