Real gross domestic product (GDP) increased at an annual rate of 0.7% in the fourth quarter of 2025 according to the second estimate released today by the U.S. Bureau of Economic Analysis. In the third quarter, real GDP increased 4.4%.
The contributors to the increase in real GDP in the fourth quarter were increases in consumer spending and investment. These movements were partly offset by decreases in government spending and exports. Imports, which are a subtraction in the calculation of GDP, decreased.
Personal consumption added 1.33 percentage points (pp) to growth, following a 2.34 pp addition in the third quarter of 2025. The increase in PCE was driven by services (1.25 pp) such as those in household consumption expenditure: healthcare (0.33 pp), financial services and insurance (0.23 pp), and housing and utilities (0.25 pp). Goods added (0.07 pp) to real GDP, with durable goods not contributing to GDP. Nondurable goods added (0.08 pp) with other nondurable goods adding (0.09) and clothing and footwear adding (0.08 pp).
Business investment added 0.29 pp to real GDP. Non-residential fixed investment added 0.31 pp, with structures subtracting 0.21 pp. Equipment and information processing equipment added 0.21 pp and 0.31 pp, respectively. Transportation equipment subtracted 0.38 pp, while information processing equipment added (0.66). Residential fixed investment subtracted 0.28 pp.
Government spending subtracted 1.03 pp from real GDP. The Federal government subtracted 1.16 pp to real GDP while state and local added 0.13 pp.
Net exports subtracted 0.22 pp from growth. Exports subtracted 0.36 pp after adding 1.00 pp in the third quarter of 2025, while imports added 0.15 pp to real GDP after adding 0.62 pp in the third quarter of 2025.
Read the BEA release.
