March 13 (UPI) — The U.S. gross domestic product rose at a inflation-adjusted rate of 0.7% in the fourth quarter of 2025, the Commerce Department reported Friday.

The revised GDP figure was about half the 1.4% growth the department’s Bureau of Economic Analysis originally expected for the months of October, November and December, the report said. The Dow Jones originally forecast a growth of 1.5%.

The GDP measures the economic activity — both goods and services — of a particular region.

The 0.7% growth was a marked departure from the 4.4% growth recorded in the third quarter. For the full year, there was a 2.1% increase in GDP, down from 2.8% in 2024.

The BEA said increases in consumer spending and investment contributed to the weakened GDP along with decreases in government spending and exports.

Meanwhile, inflation remained relatively stable with the personal consumption expenditures price index at a seasonally adjusted growth of 0.3% as forecast.

David Russell, global head of market strategy at TradeStation, told CNBC that the downward revision in the GDP was a “gut check” as the world enters an “energy crunch” amid conflict in Iran.

“The soft January durable goods data also suggests the economy entered this crisis weaker than hoped,” he said. “This creates challenges for investors with PCE inflation still running well above the [Federal Reserve’s] target.”