The US economy expanded at just half the initially-reported pace in Q4, the BEA said Friday.

This is old news in the most literal sense of the term, but the scope of the revision bears a mention.

Recall that the advance read on headline growth for the world’s largest economy, released late last month, itself counted as a disappointment: 1.4% was the slowest pace in nearly two years if you exclude the first quarter of 2025, when the figures were distorted by the impact of trade policy.

Friday’s second estimate saw that already lackluster headline pace revised to show a mere 0.7% annual growth rate. Economists expected no change.

As the figure reminds you, the original consensus for GDP in Q4, a quarter impacted by the longest US government shutdown on record, was 3%. The advance read undershot that by half, and now we have a second estimate which undershot the advance read by that same margin.

It goes without saying that Friday’s revisions still showed government outlays as the biggest drag. From a contribution perspective, that line item subtracted -1.03ppt versus -0.9ppt in the advance tally.

But the personal consumption contribution was likewise revised down to reflect +1.33ppt fillip from +1.58ppt as initially reported. Investment’s contribution was +0.29ppt in the second reckoning versus nearly half a point in the first tally.

So while you can still blame the shutdown, you should note that both spending and investment were materially weaker than thought.

The annualized pace of consumer spending in Q4 was revised to 2% from 2.4% as originally reported.

As for the key “final sales to private domestic purchasers” line, it showed a 1.9% gain on Friday, down from 2.4% in the initial estimate and a full percentage point lower versus the final tally for Q3 2025.

Insult to injury: The price index was revised higher to 3.8%. The quarterly core PCE measure was unchanged at an uncomfortably warm 2.7%.