--- title: "The U.S. GDP rose only 1.4% last quarter, far below expectations, and the expectation for interest rate cuts is heating up again" description: "The GDP growth in the United States for the fourth quarter of last year was only 1.4%, far below the expected 3%, marking the lowest growth rate in over a year. The cautious attitude of households in " type: "news" locale: "en" url: "https://longbridge.com/en/news/276522754.md" published_at: "2026-02-22T01:26:03.000Z" --- # The U.S. GDP rose only 1.4% last quarter, far below expectations, and the expectation for interest rate cuts is heating up again > The GDP growth in the United States for the fourth quarter of last year was only 1.4%, far below the expected 3%, marking the lowest growth rate in over a year. The cautious attitude of households in a high-interest-rate environment is evident, as personal consumption expenditures are still growing positively, but spending on goods and services has slowed down. Residential investment has turned negative, corporate investment has also slowed, and net exports have made a negative contribution. Government spending provided about 0.4 percentage points of support, while inventory changes contributed approximately 0.2 percentage points to growth. Market expectations for further interest rate cuts by the Federal Reserve have increased The GDP growth of the United States in the fourth quarter of last year was only 1.4%, far below the market's initial estimate of 3%, and significantly slower than the 2.9% in the third quarter, marking the lowest growth rate in over a year. The data quickly stirred market nerves, raising expectations for another interest rate cut by the Federal Reserve. ## Households Cautious in High-Interest Environment From a structural perspective, signs of cooling in the economic engine have emerged. Personal consumption expenditures, which account for about two-thirds of GDP, still maintained positive growth, contributing about 0.9 percentage points. However, the slowdown in goods spending and the waning momentum in service spending indicate that households are becoming more cautious in a high-interest-rate environment. ## Residential Investment Turns Negative Corporate investment has clearly hit the brakes, with slower growth in equipment and software spending, contributing only about 0.2 percentage points overall. Residential investment has turned negative, dragging down about 0.1 percentage points, reflecting the continued suppressive effect of high interest rates on real estate transactions and construction activities. Net exports also showed a slight negative contribution, as U.S. export momentum faces headwinds amid weakening global demand. Government spending provided support of about 0.4 percentage points, becoming an important buffer for stabilizing the economy. Inventory changes contributed about 0.2 percentage points to growth, but its high volatility makes it difficult to serve as a long-term source of momentum ### Related Stocks - [.DJI.US - Dow Jones Industrial Average](https://longbridge.com/en/quote/.DJI.US.md) - [.DJU.US - Dow Jones Utility Average](https://longbridge.com/en/quote/.DJU.US.md) - [.IXIC.US - NASDAQ Composite Index](https://longbridge.com/en/quote/.IXIC.US.md) - [VFH.US - VG Financial](https://longbridge.com/en/quote/VFH.US.md) - [QQQM.US - Invesco Nasdaq 100 ETF](https://longbridge.com/en/quote/QQQM.US.md) - [IAI.US - ISHRS Us Brokers & Sec Exchg](https://longbridge.com/en/quote/IAI.US.md) - [.SPX.US - S&P 500](https://longbridge.com/en/quote/.SPX.US.md) - [.DJUS.US - Dow Jones U.S. Index](https://longbridge.com/en/quote/.DJUS.US.md) - [XLF.US - Financial Select Sector SPDR Fund](https://longbridge.com/en/quote/XLF.US.md) - [QQQ.US - Invesco QQQ Trust](https://longbridge.com/en/quote/QQQ.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | Q4 US GDP Rises 1.4% vs 2.8% Gain Expected, 4.4% Gain in Q3 | Q4 US GDP Rises 1.4% vs 2.8% Gain Expected, 4.4% Gain in Q3 | [Link](https://longbridge.com/en/news/276449739.md) | | Trump to make new economic pitch in Georgia as prices stay high | Trump is set to deliver an economic speech in Georgia, aiming to reassure voters about his and the Republicans' plans to | [Link](https://longbridge.com/en/news/276323869.md) | | US trading partners cheer Supreme Court tariff ruling — but businesses must still navigate 'murky waters' | The U.S. Supreme Court voted 6-3 to strike down large parts of President Trump's tariff policies Friday. | [Link](https://longbridge.com/en/news/276468032.md) | | New Home Sales Fall in December, 2025, Delayed Data Show | New Home Sales Fall in December, 2025, Delayed Data Show | [Link](https://longbridge.com/en/news/276472115.md) | | QUOTES-Industry reaction to US Supreme Court ruling on Trump's global tariffs | The U.S. Supreme Court's ruling to overturn Trump's emergency tariffs has been welcomed by businesses and industry group | [Link](https://longbridge.com/en/news/276482621.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.