Major Economies Report Sharp Slowdown as US GDP Revised Down and Eurozone Industry Shrinks

The United States government revised its fourth-quarter 2025 gross domestic product growth downward to an annualized rate of 0.7 percent, a significant drop from the initial estimate of 1.4 percent. Data released by the Commerce Department on March 13, 2026, indicates the economy slowed more sharply at the end of last year than previously reported, following growth rates of 4.4 percent in the third quarter and 3.8 percent in the second quarter. Despite the soft growth figures, equity markets rallied as the data bolstered investor expectations for potential interest rate cuts by the Federal Reserve. Inflation figures provided some stability, as the PCE price index for February 2026 met economist expectations. While overall growth cooled, consumer spending showed resilience with a recorded increase in January. The U.S. economy experienced a period of robust expansion throughout much of 2025, driven by strong labor markets and consumer demand. However, the revision to 0.7 percent represents the weakest quarterly performance since the post-pandemic recovery period. Historically, the Federal Reserve has utilized such cooling data to justify shifts in monetary policy, particularly when inflation shows signs of stabilizing near its 2 percent target.

The United Kingdom economy showed zero growth in January 2026, according to data released by the Office for National Statistics. The 0.0 percent reading missed the median forecast of 0.2 percent growth predicted by economists in a Reuters poll, suggesting the British economy lost momentum unexpectedly at the start of the year. Chancellor of the Exchequer Rachel Reeves faces increasing pressure to demonstrate economic stability as the country prepares for potential energy price volatility. Business sentiment also showed signs of cooling, as the Lloyds business barometer fell to a net balance of 44 percent in January from 47 percent in December. Analysts noted that these figures place the British economy on fragile footing even before accounting for the geopolitical impacts of recent international conflicts. „Economy on shaky ground even before Iran war” — Dharshini David via BBC

Industrial production in the Eurozone fell by 1.5 percent in January 2026, a result that was significantly worse than the 0.6 percent growth anticipated by markets. Data from Eurostat revealed that industrial output in the region is now 3 percent below its 2021 levels. The decline was widespread across the continent's largest economies, with Germany, Spain, and Italy all reporting contractions in output. In Italy, the national statistics bureau Istat reported a 0.6 percent decline in industrial production for January. However, alternative metrics provided a different view of the broader business climate, with some reports indicating a net balance of 44 percent for certain business barometers, though Istat maintained the 0.6 percent figure for industrial output. US GDP Growth Trend 2025: 2025-Q2: 3.8, 2025-Q3: 4.4, 2025-Q4: 0.7