March 13, 2026
The US economy may be in bigger trouble than we originally thought and now with this war – all bets may be off.
That’s because today – we learned that instead of the fourth quarter gross domestic product –GDP – being 1.4%. The Bureau of Economic Analysis said the GDP in the fourth quarter of 2025 was actually just 0.7%. That is cut in half. And that’s not all.
Today’s announcement also found that consumer spending and business investment were also much lower in the fourth quarter of 2025 than the agency originally said. Now – the reality is there is nothing nefarious about today’s revisions. We know revisions can happen – as more data comes in. Sometimes numbers are revised upwards but in this case – today– the 4th quarter GDP was revised down. And that’s not what investors and economists thought was going to happen.
Just so we’re clear the GDP is the measurement of the total monetary value of all goods and services produced within a country’s borders during a specific period of time. This really is used as a measurement of the health of the u-s economy and with today’s revision – you can see the third quarter of 2025 saw a GDP total of 4.4% and then the fourth quarter it dropped off dramatically to just 0.7%. And when you add up the total GDP in 2025 it was just 2.1%. The total GDP in 2024 was 2.8%. That is called a slow down my friends.
Yes – as I reported a few weeks ago this slow down was impacted by the government shutdown but – we’re now seeing that consumer spending which is usually the back bone of the US economy – was also much slower than we thought in the fourth quarter.
And here’s the thing – most economists had accepted that Q4 in 2025 was slow – but they were expecting a big bounce back in the US economy in the first quarter of 2026 because experts were expecting that taxpayers would see bigger tax refunds because of the big beautiful bill…which would in theory give them more spending money to buy stuff and once again prop up the economy. But with inflation remaining stubbornly high especially for necessities like food, energy and shelter – and the threat of stag-flation looming – and now — the US entering this war with Iran in a much weaker economic position than we first thought — the big boom economists were predicting for the first quarter – may end up being a bust. And for you – that bust could include even higher inflation as long as this war drags on.
Read the BEA report here.
