After two straight quarters of 0, U.S. economic output is in a downward shift in the next report due in the fourth quarter of 2025, according to the median estimate for a set of nonstats. The lack of expected growth is substantial, but unlikely to trigger a recession warning based on current numbers.
According to today’s median estimate, Q4 GDP is expected to grow by a modest 1.3% (annualized). This is below the sizzling 4.3% increase reported for Q3. The Bureau of Economic Analysis was originally scheduled to publish Q4 data on January 29, but the government shutdown has delayed the update until the date announced.
The most optimistic version of the median estimate is the Atlanta Fed’s model, which is currently projecting GDP growth of 2.7 percent (as of January 5). But even if the estimate is correct, it still amounts to a significant slowdown in growth after a strong run during Q2 and Q3.
Looking ahead to Q4 still offers an encouraging outlook, says Oxford Economics chief US economist Michael Pearce. “We expect policy uncertainty, a boost from tax cuts and the recent easing of fiscal policy to strengthen the economy in 2026,” he said.
Perhaps, but the latest nowcasts suggest a slight cooling in the last quarter of 2025 before a possible recovery this year. “Flash data for December shows that recent economic growth is decelerating sharply,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. Speaking in mid-December, he suggested: “Economic activity could soften further as we move into 2026, with sales picking up particularly sharply in the run-up to the holiday season.”