So, about that economic soft landing everyone was hoping for... it might have been a bit bumpier than expected. New data out Friday shows the U.S. economy grew at a much slower clip at the end of 2025 than we initially thought.
The Bureau of Economic Analysis's second estimate pegs fourth-quarter Gross Domestic Product growth at an annualized rate of just 0.7%. That's a significant downward revision from the first estimate of 1.4% and a sharp deceleration from the 4.4% pace clocked in the third quarter. The economy, it seems, hit the brakes pretty hard.
In a separate report, we got a mixed bag on inflation to start 2026. The broad Personal Consumption Expenditures (PCE) price index rose 2.8% year-over-year in January, which is actually a slight cool-down from December's 2.9% and came in below expectations.
But here's the number the Federal Reserve watches most closely: Core PCE, which strips out volatile food and energy prices. That gauge ticked up to 3.1% in January, accelerating from 3.0% the prior month and matching forecasts. It's a reminder that the last mile of getting inflation back to the Fed's 2% target can be a stubborn one.
