Wall Street accelerated its decline in futures trading after the data. The dollar rose slightly against the Swedish krona. Interest rate movements were limited.
The US economy grew at an annual rate of 1.4 percent in the fourth quarter. This was clearly lower than the expected 2.8 percent, according to a Bloomberg compilation. It is also a significant slowdown from the third quarter, when annualized growth was 4.4 percent. For the full year 2025, growth was 2.2 percent.
“The Democrats’ shutdown”
Just over half an hour before the figures were publicly released, US President Donald Trump wrote on Truth Social that the US economy slowed down "at least two percentage points" due to what he called the "Democratic shutdown."
Indicators had raised hopes that we would see growth closer to 3 percent, so 1.4 percent is a big disappointment, Brian Jacobsen at Annex Wealth Management told Bloomberg, adding that inflation is still too high.
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Inflation unexpectedly high
Core inflation in the United States rose to 3.0 percent in December, according to the PCE measure. This compares with an average forecast among analysts of 2.9 percent, according to a Bloomberg compilation of forecasts. In November, the same inflation measure was 2.8 percent.
PCE inflation is regarded by the US Federal Reserve (Fed) as the most important measure of price increases when making decisions about future policy rates. Unlike the more common CPI, which is based on a basket of goods, PCE inflation is calculated from what is actually consumed.
