Updated: 20-Feb-26 09:39 ET
| Q4 GDP-Adv. |
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| Updated: 20-Feb-26 09:39 ET |
Highlights
- The Advance Q4 GDP report was a mixed bag. Overall growth was disappointing, with real GDP increasing at an annual rate of 1.4% (Briefing.com consensus: 3.0%) on the heels of a 4.4% increase in the third quarter. The GDP Price Deflator increased 3.6% (Briefing.com consensus: 3.3%) versus 3.8% in the third quarter.
Key Factors
- Personal consumption expenditures increased 2.4% versus 3.5% in the third quarter. The PCE component contributed 1.58 percentage points to real GDP growth in the fourth quarter.
- Gross private domestic investment was up 3.8% versus being flat in the third quarter. Gross private domestic investment contributed 0.66 percentage points to growth in the fourth quarter.
- Exports decreased 0.9% after a 9.6% increase in the third quarter. Imports fell 1.3% after sliding 4.4% in the third quarter. Net exports added 0.08 percentage points to growth in the fourth quarter.
- Government spending declined 5.1% following a 2.2% increase in the third quarter. Government spending subtracted 0.90 percentage points from growth in the fourth quarter.
- Real final sales of domestic product, which excludes the change in private inventories, increased 1.2% versus 4.5% in the third quarter.
- Real final sales to private domestic purchasers increased 1.1% versus 2.8% in the third quarter.
- The personal savings rate as a percentage of disposable personal income decreased to 3.6% from 4.2% in the third quarter.
- The PCE price index increased 2.9% versus 2.8% in the third quarter. The core PCE price index, which excludes food and energy, increased 2.7% versus 2.9% in the third quarter.
Big Picture
- The key takeaway from the report was the combination of weak growth and stubbornly high inflation in the fourth quarter, both of which run afoul of a market narrative that has been concentrated on stronger growth and lower inflation.
| Category | Q4 | Q3 | Q2 | Q1 | Q4 |
| GDP | 1.4% | 4.4% | 3.8% | -0.6% | 1.9% |
| Inventories (change) | -$13.6B | -$23.9B | -$18.3B | $172.0B | $17.1B |
| Final Sales | 1.2% | 4.5% | 7.5% | -3.2% | 2.8% |
| PCE | 2.4% | 3.5% | 2.5% | 0.6% | 3.9% |
| Nonresidential Inv. | 3.7% | 3.2% | 7.3% | 9.5% | -3.7% |
| Structures | -2.4% | -5.0% | -7.5% | -3.1% | -8.1% |
| Equipment | 3.2% | 5.3% | 8.5% | 21.4% | -4.3% |
| Intellectual Property | 7.4% | 5.6% | 15.0% | 6.5% | -0.6% |
| Residential Inv. | -1.5% | -7.1% | -5.1% | -1.0% | 4.3% |
| Net Exports | -$949.6B | -$955.5B | -$1058.0B | -$1380.7B | -$1069.0B |
| Export | -0.9% | 9.6% | -1.8% | 0.2% | -0.9% |
| Imports | -1.3% | -4.4% | -29.3% | 38.0% | -0.2% |
| Government | -5.1% | 2.2% | -0.1% | -1.0% | 3.3% |
| GDP Price Index | 3.6% | 3.8% | 2.1% | 3.6% | 2.4% |
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