GDP revised to 0.7%
Fourth‑quarter GDP was revised down sharply to just 0.7% annualized growth — a big downgrade that undercuts momentum heading into 2026 and raises questions about consumer resilience, reported March 13. The revision arrives alongside stickier inflation readings, complicating the Fed’s policy calculus.
The BEA’s second estimate said increases in consumer spending and gross private investment were partly offset by declines in government spending and exports, and that imports fell by less than previously estimated. (bea.gov) The agency noted the second estimate was rescheduled because of the October–November 2025 government shutdown, and CNBC reported government spending plunged about 16.7% during that period. (bea.gov) Personal consumption was reported up 2% for the quarter but was revised down by 0.4 percentage point, with services — led by health‑care spending — the largest contributor to the downward revision, while real final sales to private domestic purchasers were revised to a 1.9% increase (down 0.5 point). (cnbc.com) BEA’s price measures showed the gross domestic purchases price index rose 3.8% annualized and the PCE price index held at a 2.9% annual rate for the quarter, while the January PCE report showed core PCE rose 0.4% month‑over‑month and 3.1% year‑over‑year, keeping the Fed’s preferred gauge above target. (bea.gov) Reuters’ instant‑view noted an initial market reaction of modest equity gains (Dow +0.6%, S&P +0.8%, Nasdaq +0.9%) and a dip in the 10‑year Treasury to about 4.24% (−3 bps), and said economists polled had expected the BEA’s advance estimate to stand unrevised at 1.4%, leaving strategists to flag a tougher path for near‑term Fed rate cuts. (srnnews.com)
