US Q4 GDP, PCE Both Rise Less Than Expected, Slower Than in Q3

08:51 AM EST, 02/20/2026 (MT Newswires) -- US economic growth, measured by gross domestic product, rose by 1.4% in Q4 after a 4.4% gain in the previous quarter, slower than a 2.8% increase expected in a survey compiled by Bloomberg.

Personal consumption expenditures rose by 2.4% after a 3.5% gain, right in line with a 2.4% gain expected.

Government spending was subtraction from Q4 GDP, likely due to the government shutdown in the quarter. In addition, net exports were much smaller positive contribution to Q4 GDP than in the previous quarter.

In contrast, there was a larger positive contribution from nonresidential fixed investment, smaller negative contribution from residential fixed investment, and positive contribution from private inventories after a negative contribution in the previous quarter.

The GDP price index rose by 3.6% after a 3.8% increase in the previous quarter, while overall PCE price growth accelerated to 2.9% from 2.8% and core PCE price growth slowed to 2.7% from 2.9%. A 2.8% increase in the overall GDP price index was expected.

The quarterly measure of gross domestic product, or GDP, is released by the US Bureau of Economic Analysis at three stages, with the advance reading about a month after the end of a quarter, followed by second and third readings for the same quarter two and three months after quarter-end.

The data are broken down by each of the GDP components: consumption, fixed investment (which includes residential and nonresidential investment and inventories), government spending, and net exports (exports minus imports). The report also includes prices measures for the overall reading and the categories.

Strong GDP growth is a positive for stocks, but a negative for bonds, especially if it is accompanied by sharp inflation gains.

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