Data released before Christmas offered conflicting views on the state of the U.S. economy. Here are five things we learned from U.S. economic data released during the week ending December 26.
GDP grew in Q3. The much-delayed first estimate of Q3 Gross Domestic Product (GDP) shows the U.S. economy expanded by a seasonally adjusted annualized rate of 4.3 percent. This represented an increase from the Bureau of Economic Analysis’s Q2 estimate of +3.8 percent. Contributing positively to GDP growth were, in descending order, personal consumption (adding 239 basis points to GDP growth), net exports (+159 basis points), nonresidential fixed investment (+40 basis points), state/local government expenditures (+20 basis points), and federal government spending (+19 basis points). The change in private inventories (-22 basis points) and residential fixed investment (housing) (-22 basis points) detracted from economic growth. The same report indicates corporate profits rose by an annualized 4.2 percent during the quarter and 9.1 percent from a year earlier.
A closer look at data suggests economic activity was plodding along in September. The Chicago Fed National Activity Index (CFNAI) increased by ten basis points to -0.21. A CFNAI between -0.70 and zero indicates that the U.S. economy was growing more slowly than its historical average. Only 25 of the 85 CFNAI components contributed positively to the index, while the remaining 60 pulled it down. Among the four component categories, only one—employment rated—made a positive contribution (+0.01). The categories contributing negatively were production (-0.10), sales/orders/inventories (-0.07), and personal contribution/housing (-0.06). The CFNAI’s three-month moving average fell by 12 basis points to -0.32.
Manufacturing production remained stagnant in November. The Federal Reserve reported that manufacturing output was unchanged after decreasing 0.4 percent in October and staying steady in August and September. Production of both durables and nondurables declined by 0.1 percent and 0.2 percent, respectively. Overall industrial production increased by 0.2 percent, slightly better than October’s 0.1 percent decline. Mining output grew by 1.7 percent, while utilities output fell by 0.4 percent. Over the past year, manufacturing output has increased by 1.9 percent, and overall industrial production has risen by 2.5 percent. Manufacturing sector industrial capacity utilization remained steady at 75.4 (52-year average: 78.2 percent).
Durable goods orders declined in October. New orders for manufactured durable goods decreased by 2.2 percent to a seasonally adjusted $307.4 billion, according to the Census Bureau. Year-to-date durable goods orders of $3.100 trillion were 7.1 percent higher than the same period in 2024. Transportation goods orders dropped 6.5 percent, driven by declines in civilian orders (-20.1 percent) and defense aircraft (-32.4 percent). Durable goods orders excluding transportation goods increased slightly by 0.2 percent for the month, with an overall rise of 6.6 percent compared to last year. Orders increased for computers/electronics (+1.0 percent), machinery (+0.8 percent), and fabricated metal products (+0.5 percent). Orders fell for electrical equipment/appliances (-1.5 percent) and primary metals (-0.7 percent).
Conference sentiment slid in December. The Conference Board’s Consumer Confidence Index dropped 3.8 points to a seasonally adjusted 89.1 (1985=100). The entire decline stemmed from views on current conditions. The current conditions index fell by 9.5 points to 116.8, while the expectations measure remained steady at 70.7. For 11 consecutive months, the expectations have been below 80, which has historically signaled a potential recession. 18.7 percent of consumers viewed current economic conditions as “good” (compared to 19.1 percent who said they were “bad”). Similarly, 26.7 percent described jobs as “plentiful,” while 20.8 percent said they were “hard to get.”
Other U.S. economic data released over the past week:
Jobless Claims (Week ending December 20, 2025, First-Time Claims, seasonally adjusted): 214,000 (-10,000 vs. the previous week, -5,000 vs. the same week a year earlier). 4-week moving average: 216,750 (-4.2% vs. the same week a year earlier).
The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.
What We Learned About the U.S. Economy Last Week 