Fourth-Quarter GDP Growth Unexpectedly Revised Lower Amid Weaker Consumer Spending

03:38 PM EDT, 04/09/2026 (MT Newswires) -- The US economy expanded at a slower rate in the fourth quarter than previously projected, as consumer spending growth decelerated, the Bureau of Economic Analysis' third estimate showed Thursday.

Real gross domestic product increased at a 0.5% annualized rate in the December quarter, down from the 0.7% growth reported in the second estimate. The consensus was for the growth rate to be left unrevised in a survey compiled by Bloomberg.

The final reading marks the slowest growth rate in three quarters and follows a 4.4% expansion in the previous quarter, according to government data. The report was delayed due to last year's US federal government shutdown.

Growth in consumer spending -- as measured by personal consumption expenditures -- was revised to 1.9% from the 2% rate previously reported, which Wall Street also expected would not change.

"The downward revision to (fourth-quarter) GDP is not a major concern, as it was driven by the volatile inventory component," Oxford Economics Chief US Economist Michael Pearce said in remarks e-mailed to MT Newswires. "Gross domestic income -- a better gauge of underlying activity -- and gross domestic output of private business showed the core of the economy was still expanding at a healthy pace at the end of last year."

Fourth-quarter headline PCE inflation growth was left unchanged at 2.9%. Core PCE inflation -- which excludes the volatile food and energy components -- was also unrevised at 2.7%, official data showed.

In 2025, real GDP grew 2.1%, the same rate as previously forecast, according to the report.

The BEA said in a separate report Thursday that US inflation accelerated sequentially in February as real consumer spending edged higher. Analysts expect price pressures to intensify due to the spillover effects of the Middle East conflict.

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