{"id":58845,"date":"2026-02-20T10:08:18","date_gmt":"2026-02-20T14:08:18","guid":{"rendered":"https:\/\/stockmarketwatch.com\/stock-market-news\/us-economic-growth-slows-to-1-4-as-core-pce-inflation-surges-to-3-0\/58845\/"},"modified":"2026-02-20T10:08:18","modified_gmt":"2026-02-20T14:08:18","slug":"us-economic-growth-slows-to-1-4-as-core-pce-inflation-surges-to-3-0","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economic-growth-slows-to-1-4-as-core-pce-inflation-surges-to-3-0\/58845\/","title":{"rendered":"US Economic Growth Slows to 1.4% as Core PCE Inflation Surges to 3.0%"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>US Q4 GDP growth slowed sharply to 1.4%<\/strong>, missing the consensus estimate of <strong>2.8%<\/strong> and marking a significant deceleration from the previous quarter&#39;s <strong>4.4%<\/strong>.<\/li>\n<li><strong>The Core PCE Price Index rose 3.0% year-over-year in December<\/strong>, coming in hotter than the <strong>2.9%<\/strong> forecast and complicating the Federal Reserve&#39;s path toward interest rate cuts.<\/li>\n<li><strong>US Equity Futures turned negative<\/strong> following the data release, with <strong>Nasdaq 100 Futures<\/strong> leading the decline with a <strong>0.4%<\/strong> drop as investors weighed stagflationary signals.<\/li>\n<li><strong>Nvidia (<a href=\"\/stock\/NVDA\">NVDA<\/a>)<\/strong> shares fell <strong>0.3%<\/strong> in <a href=\"https:\/\/stockmarketwatch.com\/movers\/premarket\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Premarket Movers\">pre-market trading<\/a> following reports that its investment in <strong>OpenAI<\/strong> may be capped at <strong>$30 billion<\/strong>, down from a previously discussed <strong>$100 billion<\/strong>.<\/li>\n<li><strong>Canada reported a massive spike in industrial prices<\/strong>, with the <strong>Industrial Product Price Index<\/strong> jumping <strong>2.7%<\/strong> in January, far exceeding the <strong>0.2%<\/strong> estimate.<\/li>\n<\/ul>\n<h2>US Growth and Inflation Divergence<\/h2>\n<p>The United States economy faced a &quot;double whammy&quot; of disappointing data on Friday morning, as growth figures missed expectations while inflation indicators heated up. <strong>Gross Domestic Product (GDP)<\/strong> for the fourth quarter grew at an annualized rate of only <strong>1.4%<\/strong>, well below the <strong>2.8%<\/strong> analysts had anticipated. This slowdown suggests a cooling economy even as the <strong>GDP Price Index<\/strong> came in at <strong>3.6%<\/strong>, higher than the <strong>2.8%<\/strong> estimate.<\/p>\n<p>Simultaneously, the Federal Reserve&#39;s preferred inflation metric, the <strong>Core PCE Price Index<\/strong>, showed persistent price pressures. The index rose <strong>0.4% month-over-month<\/strong> and <strong>3.0% annually<\/strong> in December. <em>These figures suggest that while the broader economy is losing steam, the &quot;last mile&quot; of the inflation fight remains difficult for policymakers.<\/em><\/p>\n<h2>Market Reaction and Fed Outlook<\/h2>\n<p>Wall Street reacted poorly to the data mix, with <strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> E-mini futures<\/strong> falling <strong>0.3%<\/strong> and <strong>Dow futures<\/strong> slipping <strong>0.2%<\/strong>. Despite the hotter-than-expected inflation data, short-term interest-rate futures remained relatively stable, with traders largely sticking to bets for a <strong>Federal Reserve rate cut in June<\/strong>.<\/p>\n<p><strong>Spot <a href=\"https:\/\/stockmarketwatch.com\/metal\/gold\" data-internallinksmanager029f6b8e52c=\"4\" title=\"gold price today\">Gold<\/a><\/strong> remained resilient in the face of the data, trading last at <strong>$5,026.13 per ounce<\/strong>, up <strong>0.6%<\/strong> on the day. <em>The precious metal appears to be drawing support from its status as a hedge against both economic uncertainty and persistent inflation.<\/em><\/p>\n<h2>Corporate Pre-Market Movers<\/h2>\n<p>In the technology sector, <strong>Nvidia (<a href=\"\/stock\/NVDA\">NVDA<\/a>)<\/strong> saw its stock move <strong>0.3% lower<\/strong> following reports regarding its partnership with <strong>OpenAI<\/strong>. The chipmaker is reportedly close to a <strong>$30 billion investment<\/strong> in the AI firm, a significant reduction from a previously rumored <strong>$100 billion<\/strong> memorandum that failed to progress.<\/p>\n<p>Other notable movers included <strong>Comfort Systems USA (<a href=\"\/stock\/FIX\">FIX<\/a>)<\/strong>, which surged <strong>5.2%<\/strong> on positive revenue developments. Conversely, <strong>Blue Owl Capital (<a href=\"\/stock\/OWL\">OWL<\/a>)<\/strong> was linked to a <strong>2.2%<\/strong> decline in related data center interests after reports surfaced that the firm failed to secure financing for a <strong>$4 billion data center project<\/strong>.<\/p>\n<h2>Canadian Economic Update<\/h2>\n<p>Across the border, Canada released a mix of retail and industrial data. <strong>Retail Sales<\/strong> for December fell <strong>0.4%<\/strong>, slightly better than the <strong>0.5% contraction<\/strong> expected by markets. However, the real surprise came from the <strong>Industrial Product Price Index<\/strong>, which surged <strong>2.7%<\/strong> in January against a <strong>0.2%<\/strong> estimate. <strong>Raw Materials Prices<\/strong> also skyrocketed <strong>7.7%<\/strong>, suggesting that <em>inflationary pressures at the producer level may soon migrate to Canadian consumers.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways US Q4 GDP growth slowed sharply to 1.4%, missing the consensus estimate of 2.8% and marking a significant 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