US GDP growth slows in fourth quarter; PCE price index 2.9%, core 2.7%
US core personal consumption expenditures grew at a faster rate than expected in December, the US Bureau of Economic Analysis reported on Friday, but gross domestic product growth missed the consensus forecast.
PCE grew by $91.0 billion or 0.4% on a monthly basis in December, accelerating from 0.2% in November and beating the 0.3% rise projected by FXStreet-cited consensus.
The 0.4% growth ‘reflected an increase of $98.5 billion in spending on services and a decrease of $7.5 billion in spending on goods,’ the bureau said.
Annually, the PCE price index for December was up 2.9%, compared with a 2.8% rise in the year to November and also ahead of the consensus for another 2.8% increase.
For the fourth quarter of 2025, according to the bureau’s preliminary estimate, the PCE price index increased 2.9% annualised quarter-on-quarter, also accelerating from a 2.8% rise and above the consensus forecast of another 2.8% increase.
The core PCE price index was up 0.4% on a monthly basis in December, accelerating from 0.2% in November and beating the 0.3% rise projected by FXStreet-cited market consensus.
Annually, the core PCE price index rose 3.0%, compared with a 2.8% rise in the year to November and also ahead of the consensus for a 2.9% increase.
For the fourth quarter of 2025, preliminary figures showed core PCE increasing 2.7% on-quarter, slowing from a 2.9% rise in the third quarter but above the consensus forecast of a 2.6% rise.
Also on Friday, the bureau reported that the gross domestic product price index rose 3.7% in the fourth quarter, according to preliminary figures, unchanged from the prior period.
Real GDP for the quarter grew 1.4% on an annual basis, also according to preliminary figures, slowing from 4.4% in the third quarter and below the consensus for 3% growth.
The main contributors to GDP growth in the fourth quarter ‘were increases in consumer spending and investment.’
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