Real gross domestic product (GDP) rose at an annual rate of 1.4% in Q4 of 2025 according to the advance estimate, below market expectations of 2.8%. This figure is down from 4.4% in Q3, and 3.8% in Q2. The slowdown is primarily driven by a drawback in federal government expenditures during the protracted shutdown that subtracted 1.15 percentage points from GDP growth. Personal consumption expenditures also slowed as goods subtracted 0.01 points from growth, the first subtraction since 2024 Q1.
ABA’s Office of the Chief Economist believes the advance estimate of Q4 GDP shows that the U.S. economy continued to expand at the end of 2025, though at a more moderate pace. With services remaining strong, loan demand could remain healthy in that sector.
