Economic growth slowed more than expected near the end of 2025 while inflation held firm, according to data released Friday that could complicate the Federal Reserve’s path on interest rates.
Gross domestic produce rose at an annualized rate of just 1.4%, according to Commerce Department numbers released Friday, well below the Dow Jones estimate for a 2.5% gain.
For the full year in 2025, the U.S. economy grew at a 2.2% pace, down from the 2.8% increase in 2024.
At the same time, inflation held firm in December, according to the gauge most closely watched by Fed officials.
The core personal consumption expenditures price index, which excludes food and energy, rose 3% in December, according to a separate release. That matched the consensus forecast but kept the pivotal inflation measure well above the Fed’s 2% target.
