U.S. economic growth at the end of 2025 was half as strong as previously estimated.Between October and December, America’s gross domestic product grew just 0.7 percent, revised down from 1.4 percent, according to the U.S. Bureau of Economic Analysis Friday. This new number represented downward revisions in exports, consumer spending, government spending, and investment. The biggest revision was in exports, which dropped to -3.3 from the initial estimate of -0.9 percent. The biggest contributing factor to the fourth-quarter economic slowdown was the government shutdown. On the whole, real GDP increased 2.1 percent in 2025, which is still considered normal. If GDP growth is beneath 2 percent annually, that can typically be considered a recession. Meanwhile, core PCE inflation rose 3.1 percent on a 12-month basis. (That doesn’t include volatile food and energy costs.) Orders for durable goods did not see an expected increase of 1.3 percent, rising only 0.4 percent.This significantly weaker economic growth has set the stage for Donald Trump’s increasingly expensive war in Iran. The president’s illegal military campaign there has triggered disruptions in global trade and sent prices at the gas pump surging. “The big downward revision in GDP is a gut check going into this energy crunch, increasing the risk of stagflation,” David Russell, global head of market strategy at TradeStation, wrote in an analyst note Friday. “The soft January durable goods data also suggests the economy entered this crisis weaker than hoped. This creates challenges for investors with PCE inflation still running well above the Fed’s target.”Consumer spending remained relatively stable amid the backdrop of a labor market that has only gotten worse. In Q4, the U.S. job market shed 116,00 jobs—only slightly more than the 92,000 jobs it lost in February alone.