Fourth-quarter growth was revised from 1.4 to 0.5 percent

The first estimate said the U.S. economy grew at a 1.4 percent annual rate in the final three months of 2025. The second estimate, released March 13, cut that figure to 0.7 percent. BEA lowered it again to 0.5 percent in its third estimate on April 9. The latest estimate available by October 27 was 0.5 percent, a very slow expansion rather than a contraction.

What the GDP number means

Gross domestic product, or GDP, measures the value of goods and services produced in the country. The reported growth figures are annualized rates: it takes the quarter's pace and expresses what it would mean if that pace continued for a full year. It does not mean the economy produced 0.7 percent more in those three months than in the previous three months. The actual quarter-to-quarter increase was about 0.2 percent.

The United States did not stop growing. A positive number means total output rose. But a slower rate can matter to businesses deciding whether to add staff, and it can make household incomes more vulnerable if growth slows further. GDP is a wide measure, so it cannot tell one family whether its own finances improved.

Why the estimate changed

The BEA's first GDP estimate uses incomplete information. Later estimates add data from sources such as business inventories, trade and consumer spending. In March, the agency revised the fourth-quarter result down by 0.7 percentage point. In April, the third estimate lowered it by another 0.2 point, primarily because of a downward revision to investment. It said downward revisions to exports, consumer spending, government spending and investment contributed to the change.

Government spending also reflected the 2025 shutdown. BEA estimated that the reduction in federal services subtracted about one percentage point from fourth-quarter GDP growth. That was a temporary shock to measured production, but it still represented public services that were not provided during the period. The number should not be confused with a permanent loss of private-sector capacity.

Growth was not evenly distributed

Consumer spending and investment increased, while government spending and exports fell. Those parts can move in opposite directions. A family may keep spending on groceries and health care even while cutting travel. A manufacturer may buy equipment but ship fewer goods abroad. The total adds these different movements together.

The GDP report also contains price measures. A growing economy can still feel harder for households if prices rise quickly, and a slower economy does not automatically bring prices down. GDP asks how much the country produced. Inflation asks how the price of a basket changed. The two reports answer related but different questions.

How to read a revision

Revisions are part of the measurement process, not evidence that the earlier report was fabricated. The first estimate is a timely reading based on the data available at the time. The second and third estimates are more complete, though they can also be changed as annual source data arrives. For readers, the useful habit is to look at the estimate's release date and whether it is an advance, second or third reading.

By March, the revised number said the economy had entered 2026 after a weak close to 2025, with the government's own shutdown pulling down measured output. It did not prove that a recession was underway. The next quarters would show whether households and businesses could keep spending as energy prices and uncertainty rose.

BEA, revised fourth-quarter GDP · BEA, original estimate