US, economy grows 1.4%, well below expectations. Inflation on the rise

The US ended 2025 with economic growth of 2.2 per cent, slowing from the plus 2.8 per cent recorded in 2024. This was reported by the Bureau of Economic Analysis, which today provided a new reading of fourth-quarter data in which US GDP recorded annualised growth of 1.4 per cent, slowing sharply after the plus 4.4 per cent recorded in the third quarter.

The figure is below average expectations, which predicted a year-on-year growth of practically double the last three months of the year.

Also worse than estimated was inflation, which accelerated in December. The Federal Reserve's preferred measure for calculating it, the Pce (personal consumption expenditures price index) figure, rose to a February 2025 high of 0.4 per cent month-on-month, while it had stood at 0.2 per cent in November. Analysts had expected an increase of 0.3%. On an annual basis, inflation rose by 2.9 %, against analysts' expectations of 2.8 % (as in the previous month).

The 'core' component of the figure, stripped of volatile elements, grew by 0.4%, twice as much as the previous month and against expectations for 0.3%. Compared to a year earlier, the figure rose by 3% in April 2025, while in November it had risen by 2.9%. The forecasts were spot on. The Pce value is contained in the data released by the Commerce Department on personal income and consumer spending.

The Bureau of Economic Analysis report also points out a curious aspect of the US economy: although it is growing, it is not creating many jobs. Growth was 2.2% in 2025, yet a government report last week showed that employers created fewer than 200,000 jobs last year, the lowest number since Covid hit in 2020.