Short Answer
The U.S. economy expanded at a 2.1% real annual rate in 2025, marking the weakest performance since the pandemic-driven contraction of 2020 and a clear step down from 2.8% growth in 2024. Yet the slowdown did not last long: in the first quarter of 2026, year-over-year GDP growth ticked up to 2.7%, supported by stronger exports and a rebound in government spending. Understanding U.S. economic growth by year requires looking beyond a single headline number—nominal and real growth rates, annual and quarterly measures, and the underlying components of GDP all tell different parts of the story.
FAQ
What was U.S. GDP growth in 2025?
U.S. real GDP grew 2.1% in 2025, according to Trading Economics and the Bureau of Economic Analysis. That was down from 2.8% in 2024 and marked the weakest annual growth rate since the 2.1% contraction in 2020. In current-dollar terms, GDP grew 5.0% in 2025, reflecting the impact of inflation.
What is the difference between real and nominal GDP growth?
Nominal GDP growth is measured in current dollars and includes the effects of inflation. Real GDP growth adjusts for price changes, so it reflects only changes in the quantity of goods and services produced. For example, current-dollar GDP grew 5.0% in 2025, while real GDP grew 2.1%; the difference is due to higher prices.
Why did U.S. economic growth slow in 2025?
The 2025 slowdown was driven by several factors, including the rollout of U.S. tariffs, which prompted businesses and households to front-load purchases and drove imports to record highs, widening the trade deficit. Residential investment declined, and federal government spending contracted amid the longest government shutdown on record. Public-sector employment also fell due to federal workforce reductions.
What is the current U.S. GDP growth rate in 2026?
In the first quarter of 2026, U.S. GDP grew 2.7% year-over-year, up from 2.0% in the previous quarter. The improvement was supported by faster export growth, a decline in imports, and a rebound in government spending, while private investment contracted.
How is U.S. GDP growth calculated?
The Bureau of Economic Analysis calculates GDP using the expenditure approach: GDP = personal consumption expenditures + gross private domestic investment + government spending + net exports (exports minus imports). Real GDP is then calculated by adjusting these components for inflation using chain-type price indexes.
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