All articles tagged with #gdp growth
The Commerce Department revised U.S. fourth-quarter GDP growth down to 0.5%, signaling a softer end to the year and potentially influencing the 2026 outlook and Federal Reserve policy as spending and investment cooled.
February core PCE rose 3% and headline inflation 2.8%, while consumer spending fell 0.1% and personal income rose 0.4%. GDP for Q4 was revised down to 0.5% growth (down from 0.7%), driven by weaker investment and lower real final sales. The report suggests stagflation pressures even before the Iran conflict boosts energy prices, with Fed officials expected to keep rates on hold as inflation remains above target.
Moody’s Analytics chief economist Mark Zandi says US recession risk is rising and could be triggered if oil averages about $125 per barrel in Q2; their simulations identify that level as a plausible tipping point amid Iran tensions and a weak labor market. Although not predicting an outright downturn in their baseline outlook, higher oil prices have shaved roughly 15–20 basis points from 2026 real GDP growth, and their April forecast expects a further rise in oil prices that would weigh on growth and push recession probabilities higher.
The World Trade Organization warns that elevated energy prices tied to the Iran conflict could slow global GDP growth (potentially from about 2.8% to around 2.5%) and curb the AI investment boom, as supply concerns over the Strait of Hormuz and broader Middle East tension push oil and gas prices higher.
Initial unemployment claims fell to 205,000 for the week ending March 14 (lowest since mid‑January), while continuing claims rose to 1.86 million for the week ending March 7. Federal Reserve Chair Powell described the 4.4% unemployment rate as stable and said hiring and layoffs remain unusually low. Fed officials project unemployment around 4.4% this year, with GDP growth seen at about 2.4% in 2026 and 2.3% in 2027, and they expect at least one quarter-point rate cut later this year as the economy stays resilient despite layoffs at large firms.
Goldman Sachs economists say AI-related investments in 2025 contributed essentially zero to U.S. GDP growth, arguing much of the spending is offset by imported hardware and measurement gaps, challenging the view of AI as a strong growth engine even as roughly $700B is projected to be spent on AI infrastructure this year; surveys also show many firms use AI but do not see productivity or employment gains.
More than 150 countries signed an IPBES assessment warning that GDP-focused growth and other unsustainable economic activity are driving biodiversity loss: about 1 in 8 of the world’s roughly 8 million species are threatened and 75% of Earth’s land has been altered by humans. Markets fail to price biodiversity’s services, so the report calls for broad policy, legal, and regulatory reforms—business action alone isn’t enough—amid shifting EU rules and the US’s withdrawal from IPBES.
December job openings dropped to the lowest level since mid-2020, with layoffs plans rising and private payrolls growing only modestly, signaling a cooling labor market even as GDP growth remains solid—creating a mixed picture for Trump’s economic messaging while White House officials tout progress.
Analyses show U.S. GDP growth in 2025 was driven primarily by consumer spending, with AI-related capital expenditures ranking a distant second. Adjusted for imports, AI’s net contribution to growth averaged 0.4–0.5 percentage points (roughly 20–25% of growth excluding imports), while software and computers were AI’s biggest GDP contributors rather than data centers. Some analysts argue AI’s impact on GDP is overstated. Quarterly data later in 2025 showed strong growth (Q3 at 4.3% annualized) despite a negative Q1, with Q2’s pace in between. Looking ahead to 2026, consumption is expected to remain resilient, aided by AI investments, possible Fed rate cuts, and unemployment stabilization tied to slower immigration; productivity and job creation will be key watchpoints.
U.S. personal consumption expenditures price index rose 0.2% in November, leaving inflation at 2.8% for both headline and core (October was 2.7%), with energy costs up and food flat. Personal income rose modestly, while spending climbed 0.5% in October and November. The saving rate edged up to 3.5% in November. GDP growth for Q3 was revised to 4.4%, and jobless claims remain near two-year lows, signaling continued spending resilience. Investors expect the Fed to hold rates at the upcoming meeting, with futures pricing in up to two rate cuts later this year.
UK GDP rose 0.3% in November, beating Reuters’ 0.1% forecast, with services up 0.3% and production up 1.1% while construction fell 1.3%; October’s 0.1% drop was linked to Jaguar Land Rover disruptions. Analysts expect a stronger 2026 rebound as the Bank of England continues its rate-cutting path.
The Congressional Budget Office forecasts that the Federal Reserve will cut interest rates in 2026, with rates settling at 3.4% by 2028, while 10-year Treasury yields are expected to rise slightly, impacting mortgage rates. The report also projects a peak in unemployment at 4.6% in 2026, with GDP growth slowing to around 1.8-2.2% through 2028, influenced by recent fiscal policies and immigration trends. Inflation is expected to remain above 2% in the near term, gradually decreasing by 2028.
The speech discusses cautious optimism for 2026, highlighting progress in inflation reduction, especially in housing and core services, and the need for clarity on economic growth and labor market trends amid divergent signals. It emphasizes the importance of monetary policy in maintaining price stability and maximum employment, while considering structural changes like AI's influence on productivity and employment. The speaker advocates for patience and credibility in policy decisions, aiming for a balanced approach to economic stability.
Singapore's economy grew by 5.7% in Q4 2025, driven by a 15% surge in manufacturing, especially in biomedical and electronics sectors, leading to a full-year GDP growth of 4.8%, surpassing expectations despite global trade tensions.
The US economy heading into 2026 shows signs of strength with strong GDP growth driven by AI investments and a robust stock market, but faces challenges like rising unemployment, inflation, and consumer pessimism, making the overall outlook complex and uncertain.