⬤ The Atlanta Fed's GDPNow model revised its Q4 2025 GDP growth forecast down to 5.1% on January 9, 2026, dropping from the earlier 5.4% estimate. The revision came after fresh data from the US Bureau of Labor Statistics and Census Bureau showed weakness in the housing sector. Residential investment growth, which was expected to add 1.5% to GDP, now sits at a negative 5.8%—a dramatic swing that caught many analysts off guard.
⬤ This update shows just how quickly economic forecasts can shift when new data hits. The housing market, which was supposed to help prop up growth, is now pulling in the opposite direction. While consumer spending and government expenditures are still contributing to the overall picture, the residential investment slump has put a noticeable dent in expectations.
⬤ Even with the downgrade, a 5.1% growth rate still points to a fairly robust economy heading into the end of 2025. The model gets updated regularly as new data rolls in, with the next revision set for January 14. That means there's room for the numbers to move again—either up or down—depending on what the next batch of economic indicators reveals.
⬤ For markets, this revision matters because it highlights real trouble spots in the economy, especially in housing and construction. The sharp reversal in residential investment could ripple through related industries and shift investor sentiment about growth prospects. As more updates come through, traders and analysts will be watching closely to see if this trend continues or if the numbers bounce back.
