The Digester

The Commerce Department revised fourth-quarter GDP down sharply to a 0.7% annualized pace while January core inflation accelerated to 3.1%, signaling slower growth and stickier prices heading into 2026.

Q4 GDP was revised down to a 0.7% annualized rate, from a prior estimate of 1.4% and below the 1.5% consensus.
The Q4 slowdown follows a 4.4% gain in the prior quarter and leaves full-year 2025 GDP at 2.1%, down 0.1 percentage point from the earlier reading.
The downward GDP revision reflected adjustments to consumer spending, government spending and exports, and a smaller-than-expected decline in imports.
Headline PCE inflation rose 0.3% in January and 2.8% on a 12-month basis.
Core PCE, which excludes food and energy, rose 0.4% in January and 3.1% year over year, 0.1 percentage point higher than December.
The report predates a Supreme Court ruling voiding many Trump-era tariffs and the early March strikes on Iran, after which Brent crude reached about $100 a barrel.

US Q4 GDP Slumps to 0.7% as January Core Inflation Rises to 3.1%

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