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The economy may be in better shape than predicted A Federal Reserve estimate projects robust fourth-quarter growth By Mark Huffman of ConsumerAffairs January 23, 2026 U.S. GDP remains strong, with nowcasts pointing to an exceptionally high fourth-quarter growth rate Consumer spending and business investment are leading sectors, while housing and some investments lag Mixed signals in labor markets and delayed official data leave uncertainties ahead Preliminary indicators show the U.S. economy continued to expand at a robust pace at the end of 2025, with gross domestic product (GDP) signaling one of the strongest quarterly growth readings in recent memory. According to the Federal Reserve Bank of Atlantas GDPNow model, which synthesizes recent economic data ahead of official release figures, real GDP growth in the fourth quarter of 2025 is currently estimated at about 5.4% annualized. Thats a dramatic upward revision from earlier forecasts and well above trend levels. Official GDP estimates for Q4 have been delayed due to data availability issues, but analysts and markets are closely watching these nowcasts as a proxy until the Bureau of Economic Analysis (BEA) releases formal numbers later this year. Strongest performers in the economy U.S. consumer demand which accounts for roughly two-thirds of GDP continues to be a major engine of growth. Recent estimates suggest persistent strength in household consumption, particularly in services and discretionary spending categories, helping underpin broad eco

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