US Economy Nearly Stalls: Growth Drops to Just 0.5% Before Iran Conflict

The US economy hit the brakes hard at the end of 2025, and things might get worse with a new war starting.

Economic growth (how fast the country's total production increases) dropped to just 0.5% in the final three months of 2025. That's like a car going from 60 mph to almost stopping - the economy went from growing at 4.4% to barely moving at all.

Here's what went wrong: • Government shutdown - Federal workers weren't getting paid, which meant less spending • Businesses stopped building - Construction companies built fewer new homes • Unsold products piled up - Companies made too much stuff that nobody bought • Consumer spending slowed - Regular people spent less money shopping

The slowdown happened before the Iran war started, which means the conflict will likely make things even tougher. When the government first reported these numbers, they said growth was 1.4%. Then they corrected it to 0.7%. Now we know it was actually just 0.5% - much worse than anyone thought.

GDP (Gross Domestic Product - the total value of everything a country produces) is like a health check for the economy. When it's growing fast, times are good. When it barely grows, like now, it means trouble ahead.

The first quarter of 2026 doesn't look much better, with growth expected at just 1.3%. With a new war adding pressure, Americans should prepare for tougher economic times ahead.

This is an AI-generated summary. Read the original article at: https://www.marketwatch.com/story/the-economy-slowed-sharply-even-before-the-iran-war-where-does-it-go-from-here-ed17c87c?mod=mw_rss_topstories