Short Answer
Both the model and the market overwhelmingly agree that US GDP growth in Q4 2025 will be above -0.5%, with only minor residual uncertainty.
1. Executive Verdict
- Atlanta Fed's 4.2% Q4 2025 GDPNow forecast warrants significant caution.
- AI infrastructure spending by hyperscalers is significantly reshaping economic forecasts.
- GDP-GDI divergence signals notably lower growth than the GDPNow forecast.
- Government shutdowns introduce significant uncertainty into initial GDP estimates.
- Advance Q4 2025 GDP estimate release on February 20, 2026 is critical.
- Market consensus for Q4 2025 GDP growth hovers around 2.5%.
Who Wins and Why
| Outcome | Market | Model | Why |
|---|---|---|---|
| Above 3.5% | 47% | 45.5% | A period of rapid disinflation, enabling aggressive monetary easing, could fuel this outcome. |
| Above 1.0% | 1% | 1% | Stable inflation and a robust labor market should support ongoing economic expansion. |
| Above 3.0% | 63% | 62.5% | Strong consumer demand, coupled with significant business capital expenditure, could drive high growth. |
| Above 2.5% | 79% | 0.9% | Accelerated productivity gains and technological advancements might lead to stronger performance. |
| Above 2.0% | 88% | 1% | Improved global trade conditions and increasing domestic investment could boost GDP. |
Current Context
Discussions around US GDP growth for Q4 2025 are heavily focused on pre-release forecasts, as the official Advance Estimate has been delayed. The release of the Advance Estimate for Q4 2025 GDP, initially scheduled for January 29, was rescheduled to February 20, 2026, at 8:30 a.m. (ET) due to a federal government shutdown in late 2025. The Atlanta Fed's GDPNow model currently projects Q4 2025 real GDP growth at a seasonally adjusted annual rate of 4.2 percent as of February 2, 2026. This projection stands notably higher than other expert forecasts, such as the Philadelphia Fed's November 2025 survey anticipating 1.9% for 2025 and Deloitte Insights' December 2025 forecast of 2.0% for 2025. News from early February 2026 indicates that three Federal Reserve rate cuts are likely due to ongoing unemployment concerns, with reports suggesting a "pause that refreshes" in the economy, strong US stocks, and an end to the manufacturing recession.
Analysts prioritize the official GDP estimate and specific economic indicators to gain a comprehensive view. Key data points being sought include the official Q4 2025 GDP growth rate, contributions from consumer spending, business fixed investment (particularly in artificial intelligence), housing market activity, government spending, and net exports. Labor market indicators such as job creation rates and the unemployment rate, alongside inflation figures like the CPI and PCE price index, are also under scrutiny for their implications on broader economic health and Federal Reserve policy. Expert opinions vary widely; while GDPNow points to 4.2% growth, some experts, like those at Haver Analytics in early January 2026, expressed skepticism, suggesting underlying data indicated growth at potentially half that rate. Other forecasts include Equiti's October 2025 prediction of 1.0–1.5% quarterly output growth for Q4 2025, and Cerity Partners' October 2025 expectation of Q4 2025 economic growth slowing closer to the long-term trend of 2.0%, influenced by tariffs and tight monetary policy. Larry Swedroe highlighted a "GDP-Labor Market Paradox" in December 2025, noting robust GDP growth alongside persistent labor market weakness.
Debates persist on growth sustainability and Federal Reserve policy implications, forming central concerns for market participants. A significant question is the discrepancy between the higher GDPNow estimates and softer data from sectors like manufacturing, housing, and employment. There are discussions about the sustainability of growth drivers, particularly whether consumer spending can continue to power the economy, especially with factors like falling savings rates compensating for slow income growth, and the actual impact of artificial intelligence (AI) investment. A major question is how the Q4 GDP data, alongside sticky inflation and a softening labor market, will influence the Federal Reserve's decisions regarding future interest rate cuts in 2026. Concerns also persist about inflation remaining above the Fed's 2% target, with tariffs identified as a contributing factor. The "GDP-Labor Market Paradox" is a topic of discussion, seeking to understand robust GDP growth amid slower job creation and rising unemployment. The next update of the Atlanta Fed's GDPNow model is scheduled for February 10, 2026.
2. Market Behavior & Price Dynamics
Historical Price (Probability)
Outcome probability
Date
This prediction market has demonstrated significant volatility, trading within a wide range of $0.24 to $0.74. While the overall trend from its starting price of 28.0% is upward, the recent price action has been characterized by a sharp downturn from its peak. In late January 2026, the market experienced a series of dramatic price swings. The probability spiked from 49.0% to a high of 71.0% between January 23 and January 27, before plummeting back down to 56.0% by January 29. This period of intense activity indicates a highly reactive and uncertain market environment as traders processed conflicting economic data ahead of the delayed official GDP release.
The primary drivers of this recent volatility were dueling economic forecasts. The price surges on January 23 and January 27 were directly caused by bullish updates from the Atlanta Fed's GDPNow model, which at one point projected a "blistering 5.4% annualized rate" for Q4 2025 growth. This single, high-profile data point temporarily convinced the market of a strong likelihood of growth exceeding the market's threshold. However, this optimism was quickly tempered, leading to the 14.0 percentage point drop on January 29. This sharp correction was driven by the realization that the GDPNow model was an outlier compared to the broader and more moderate consensus among private-sector economists, who anticipated growth closer to 2.0%.
The market's current price of 45.0% suggests a prevailing sentiment of uncertainty and skepticism, leaning slightly bearish. The price is hovering near a potential support level in the mid-$0.40s, an area it has tested multiple times in mid-January and revisited after the recent peak. The area above 70.0% has acted as a strong resistance level, where bullish conviction faltered. The high total volume, with trading activity intensifying during the recent price swings, indicates strong market engagement and conviction behind both the initial rally and the subsequent sell-off. The market appears to be weighing the outlier possibility of very high growth against a more probable, moderate outcome, resulting in a probability just below the 50% equilibrium point.
3. Significant Price Movements
Notable price changes detected in the chart, along with research into what caused each movement.
Outcome: Above 3.5%
📉 January 29, 2026: 14.0pp drop
Price decreased from 70.0% to 56.0%
What happened: The primary driver of the 14.0 percentage point drop in the "US GDP growth in Q4 2025? Above 3.5%" prediction market on January 29, 2026, was likely the established consensus among private-sector economists for significantly lower growth. Surveys, such as the Wall Street Journal's published on January 18, 2026, indicated a median forecast for Q4 2025 GDP growth at 2.2%, well below the 3.5% threshold. This market sentiment was likely reinforced by the U.S. Bureau of Economic Analysis (BEA) reporting an increased trade deficit for November 2025 on January 29, 2026, which generally subtracts from GDP. Social media was irrelevant, as no influential posts or viral narratives regarding Q4 2025 GDP growth were identified around the time of the price movement.
📈 January 27, 2026: 9.0pp spike
Price increased from 62.0% to 71.0%
What happened: The primary driver of the 9.0 percentage point spike in the "US GDP growth in Q4 2025? Above 3.5%" prediction market on January 27, 2026, was the Federal Reserve Bank of Atlanta's GDPNow model, which projected a "blistering 5.4% annualized rate" for Q4 2025. This estimate was widely reported in financial news on January 27, 2026, and represented a significant increase from earlier forecasts and the general market consensus of around 2.2%. The official advance estimate for Q4 2025 GDP was delayed until February 20, 2026, making the GDPNow estimate the most current and impactful indicator available to the market on that date. Social media discussions, including those on Reddit, coincided with and amplified the reporting of this robust GDPNow projection. Therefore, social media was a contributing accelerant, primarily disseminating information that originated from a credible economic model and traditional news outlets.
Outcome: Above 3.0%
📈 January 23, 2026: 18.0pp spike
Price increased from 55.0% to 73.0%
What happened: The primary driver of the 18.0 percentage point spike in the "US GDP growth in Q4 2025? Above 3.0%" prediction market on January 23, 2026, was likely the significant upward revision from the Atlanta Fed's GDPNow model. On January 12, 2026, the model nowcasted real GDP growth for Q4 2025 at a robust +5.4%, a considerable jump from its prior estimate of 2.7%, primarily due to stronger personal consumption expenditures and net exports. This influential economic forecast, released eleven days prior to the market movement, provided compelling evidence for exceeding the 3.0% threshold. While direct social media posts from key figures detailing this specific price movement were not found, the dissemination of such a notable forecast from a credible source would have likely been amplified across financial news and social platforms, acting as a contributing accelerant to the market's surge.
📉 January 22, 2026: 15.0pp drop
Price decreased from 72.0% to 57.0%
What happened: The 15.0 percentage point drop in the "US GDP growth in Q4 2025? Above 3.0%" prediction market on January 22, 2026, was primarily driven by a convergence of traditional economic forecasts and data reinforcing expectations of growth below the 3.0% threshold. The Wall Street Journal's quarterly survey, published just days before on January 18, 2026, showed a median forecast for Q4 2025 GDP growth at 2.2%, significantly below the 3.0% mark. Concurrently, while the updated Q3 2025 GDP estimate released on January 22 indicated robust past growth of 4.4%, other data released that day, such as modest increases in Personal Income and Outlays for October and November 2025, could have signaled a deceleration in economic activity leading into Q4. Social media activity from influential figures around this exact date did not contain any direct, specific claims about Q4 2025 US GDP growth that would account for this immediate and precise market movement. Social media was irrelevant in this specific price movement.
Outcome: Above 2.5%
📈 January 16, 2026: 12.0pp spike
Price increased from 73.0% to 85.0%
What happened: The primary driver of the 12.0 percentage point spike in the "US GDP growth in Q4 2025? Above 2.5%" prediction market on January 16, 2026, was likely a series of updated, more optimistic economic forecasts from reputable institutions. Specifically, the New York Fed's Nowcast model was updated on January 9, 2026, to project Q4 2025 GDP growth at 2.62%, a significant increase from its prior reading of 2.07%. Similarly, on the same day, the Atlanta Fed's GDPNow model estimated Q4 2025 GDP at a robust 5.1%. These upward revisions from highly credible economic models, directly indicating growth above the 2.5% threshold, appeared to lead the price movement. Social media activity was not identified as a primary driver and appears largely irrelevant to this specific price move.
4. Market Data
Contract Snapshot
Based on the provided page content, the specific rules for YES/NO resolution, key dates, and any special settlement conditions are not detailed. The content only states the market is about "US GDP growth in Q4 2025?".
Available Contracts
Market options and current pricing
| Outcome bucket | Yes (price) | No (price) | Implied probability |
|---|---|---|---|
| Above -0.5% | $1.00 | $0.01 | 100% |
| Above 0.5% | $1.00 | $0.02 | 100% |
| Above 0% | $1.00 | $0.01 | 100% |
| Above 1.0% | $1.00 | $0.02 | 100% |
| Above 1.25% | $1.00 | $0.05 | 100% |
| Above 1.5% | $0.96 | $0.05 | 96% |
| Above 1.75% | $0.95 | $0.07 | 95% |
| Above 2.0% | $0.88 | $0.13 | 88% |
| Above 2.5% | $0.79 | $0.22 | 79% |
| Above 3.0% | $0.63 | $0.38 | 63% |
| Above 3.5% | $0.47 | $0.55 | 47% |
| Above 4% | $0.31 | $0.70 | 31% |
| Above 4.5% | $0.17 | $0.84 | 17% |
| Above 5% | $0.11 | $0.90 | 11% |
| Above 5.5% | $0.06 | $0.95 | 6% |
| Above 6% | $0.02 | $0.99 | 2% |
Market Discussion
Discussions regarding US GDP growth in Q4 2025 highlight a divergence in expectations, with some anticipating robust expansion while others project a more modest slowdown . Optimistic viewpoints, often supported by the Atlanta Fed's GDPNow model, suggested growth rates around 4.2-5.4%, fueled by resilient consumer spending, strong private final domestic demand, and investment, particularly in artificial intelligence . Conversely, professional forecasters and economic outlooks from October and November 2025 predicted a deceleration, with estimates ranging from 1.0-2.2%, citing factors such as weaker consumer spending, subdued housing activity, and the lingering impact of fiscal restraint and tariffs contributing to sticky inflation . A significant debate on platforms like Reddit centered on whether the higher GDP figures accurately represented underlying economic health, questioning if a decrease in imports, while mathematically boosting GDP, truly indicated a surge in domestic production or consumption, and noting a "GDP-Labor Market Paradox" where strong growth coexists with a softening labor market .
5. How Reliable Is Atlanta Fed's 4.2% Q4 2025 GDPNow Forecast?
| Q4 2025 GDPNow Forecast | 4.2% |
|---|---|
| Shutdown Impact on GDP Growth | 1.0 to 2.0 percentage points reduction |
| Volatile Component Contribution | 1.9 percentage points |
The Atlanta Fed's Q4 2025 forecast warrants significant caution. The reported 4.2% GDPNow forecast for Q4 2025 appears to be substantially driven by contributions from highly volatile economic components. Specifically, Gross Private Domestic Investment (GPDI) and Net Exports (NX) are inherently less stable drivers of economic growth compared to Personal Consumption Expenditures, and are subject to wide swings.
Data integrity concerns significantly impact Q4 2025 forecast reliability. The underlying source data for Q4 2025 was severely compromised due to a late 2025 government shutdown. This disruption led to delayed, missing, and potentially unreliable economic data releases from key federal statistical agencies, which most notably affected the calculation of GPDI and NX. The Congressional Budget Office (CBO) estimated that the shutdown itself could directly reduce annualized Q4 real GDP growth by 1.0 to 2.0 percentage points.
The 4.2% figure may be a misleading 'phantom forecast'. Consequently, this high forecast could represent a statistical artifact reflecting existing data gaps and the model's assumptions rather than true economic momentum. The GDPNow model's reliance on imputation or stale data due to the shutdown means the initial high forecast might inversely signal its blindness to a negative shock, making significant downward revisions highly probable as more accurate data eventually becomes available.
6. How Do Government Shutdowns Impact GDP Estimates and Revisions?
| Q1 2019 Advance Real GDP Growth | 3.2 percent |
|---|---|
| Q1 2019 Net Real GDP Revision | -0.1 percentage points |
| Estimated Q1 2019 Shutdown GDP Impact | -0.3 percentage points (BEA estimate) |
Government shutdowns introduce significant uncertainty into initial Gross Domestic Product (GDP) advance estimates. The 35-day government shutdown in late 2018 and early 2019, for instance, led to an initial Q1 2019 Advance real GDP growth estimate of 3.2 percent, which was subsequently revised downward to 3.1 percent. Both the Bureau of Economic Analysis (BEA) and the Congressional Budget Office (CBO) concluded that this shutdown directly reduced Q1 2019 real GDP growth by approximately 0.3 percentage points (BEA) or 0.2 percent (CBO).
The BEA employs diverse imputation methods to address data gaps during such disruptions. Its hierarchy of techniques includes time-series modeling, factor models that utilize related economic series, and the integration of alternative data sources such as private payment processing data for Personal Consumption Expenditures (PCE) or shipping data for trade estimates. The Q1 2019 case illustrated the challenges, with significant component revisions: PCE was revised upward, while nonresidential fixed investment, private inventories, and net exports (driven by a strong upward revision in imports) all saw downward revisions.
Future advance estimates, like the Feb 20, 2026 release for Q4 2025 GDP following a potential shutdown, will likely face wider confidence intervals. While the BEA's methodologies and access to high-frequency alternative data have advanced since 2019, the unique economic shock of a shutdown can still introduce biases that models struggle to predict, potentially causing an overestimation of investment and an underestimation of consumption in initial reports.
7. How Is Massive AI Infrastructure Spending Reshaping Economic Forecasts?
| Amazon FY2025 CAPEX Guidance | $125 billion (majority for AWS AI) |
|---|---|
| 2025 Hyperscaler AI CAPEX Growth Rate | Approximately 70% year-over-year |
| 2026 Projected AI CAPEX Growth Rate | Low-30% range |
AI infrastructure investment surged significantly, driven by hyperscaler spending in Q4 2025. Amazon announced a full-year 2025 capital expenditure (CAPEX) guidance of $125 billion, with a substantial portion allocated to AWS's artificial intelligence requirements. This investment strategy involves acquiring advanced NVIDIA hardware, including GH200 Grace Hopper Superchips and the upcoming GB300, alongside developing proprietary silicon like Trainium 2 and Inferentia 2 to enhance cost efficiency and reduce external dependencies. Collectively, major hyperscalers' AI-related CAPEX is estimated to have grown approximately 70% in 2025, fueled by the competitive landscape in generative AI.
This dramatic AI spending growth vastly exceeded broader economic projections. Consensus institutional forecasts for the 'intellectual property products' sub-component of U.S. GDP, heavily influenced by AI CAPEX, projected only high single-digit growth for 2025. The actual 70% growth rate in AI-specific CAPEX from a limited number of companies represents an order of magnitude higher than anticipated. This substantial discrepancy indicates that macroeconomic models did not fully account for the scale of this investment cycle, suggesting future upward revisions to GDP figures.
Future AI capital expenditure growth is projected to moderate, yet remain elevated. While this concentrated spending propels growth in specific technology sectors and benefits suppliers like Nvidia, it also introduces significant concentration risk into the overall macroeconomic outlook. Looking ahead, the pace of AI CAPEX growth is expected to slow to the low-30% range in 2026. This anticipated moderation signifies a shift towards a more sustainable, though still aggressive, long-term investment approach, rather than a decline in absolute spending, which is expected to remain historically high.
8. What Does the GDP-GDI Divergence Signal for Q4 2025 Growth?
| Q4 2025 Real GDP Growth Forecast | 4.2% (Atlanta Fed GDPNow ) |
|---|---|
| Q4 2025 S&P 500 Blended EPS Growth | +11.9% year-over-year (Earnings reports ) |
| Dec 2025 Private Nonfarm Wage Growth | +3.8% year-over-year (BLS report ) |
GDI growth for Q4 2025 is notably lower than GDPNow's forecast. The estimated real annualized Gross Domestic Income (GDI) growth for Q4 2025 is projected to be between 2.0% and 3.0%, based on preliminary corporate earnings and wage data. This stands in significant contrast to the Atlanta Federal Reserve's GDPNow model forecast of 4.2% real Gross Domestic Product (GDP) growth for the same period. This substantial divergence, implying a 1.2 to 2.2 percentage point gap, extends a trend observed since late 2022 where income-side measures consistently lagged expenditure-side measures.
Decelerating labor markets and concentrated corporate profits temper GDI estimates. The lower GDI estimate is influenced by a sharply decelerating labor market, with average monthly job creation in 2025 at just 49,000 payrolls, tempering the impact of a 3.8% year-over-year increase in private nonfarm average hourly earnings in December 2025. While S&P 500 blended earnings per share (EPS) growth was robust at 11.9% year-over-year for Q4 2025, driven significantly by the technology sector, this strength is not broad-based and likely translates to a more moderate increase in the broader National Income and Product Accounts (NIPA) corporate profits component of GDI.
The widening statistical discrepancy suggests potential future downward GDP revisions. This expanding statistical discrepancy between GDI and GDP suggests a "jobless boom" scenario, where productivity gains might be driving output higher than measured income. Historically, such large and growing negative discrepancies, where GDI is lower than GDP, are associated with a greater probability of future downward revisions to GDP. The simple average of initial GDP and GDI estimates, which has historically been the best predictor of the final revised growth rate, suggests a "true" Q4 2025 growth closer to 3.1% to 3.6%, implying potential downward revisions to the initial 4.2% GDP figure.
9. What are the Q4 2025 GDPNow Model Inputs and Historical Accuracy?
| Key Data Release Window | February 10-19, 2026 (Projected) |
|---|---|
| Recent Median Absolute Error | 0.475 percentage points (Q1 2024 - Q4 2025 analysis) |
| Historical Average Absolute Error | 0.77 percentage points |
Final Q4 2025 GDPNow inputs arrive between February 10-19, 2026. The Atlanta Fed's GDPNow model relies on a specific window of data releases during this period to finalize its Q4 2025 GDP forecast. These crucial inputs include Advance Retail Sales, Industrial Production, New Residential Construction, and the Advance Report on International Trade in Goods. These reports directly impact major GDP components such as Personal Consumption Expenditures, Gross Private Domestic Investment, and Net Exports, making it important for analysts to monitor deviations from consensus to anticipate GDPNow revisions.
GDPNow exhibits a median absolute error of 0.475 percentage points. An analysis of the GDPNow model's recent accuracy, from Q1 2024 through Q4 2025, reveals this median absolute forecast error between its final estimate and the BEA's advance estimate. This suggests a typical forecast deviation of nearly half a percentage point. Historically, the model's average absolute error over its full history (2011:Q3–2025:Q2) is 0.77 percentage points, with a Root-Mean-Squared Error of 1.17 percentage points, highlighting the potential for occasional larger discrepancies. For prediction market participants, the final GDPNow forecast should be interpreted as the center of a probability distribution, allowing for the construction of a statistically-grounded confidence interval using the 0.475 percentage point median absolute error.
10. What Could Change the Odds
Key Catalysts
The most critical catalyst for the "US GDP growth in Q4 2025?" prediction market will be the release of the advance estimate for Q4 2025 GDP by the U.S. Bureau of Economic Analysis (BEA) on February 20, 2026. A significantly higher-than-expected figure, exceeding the market consensus of around 2.5% (or the Wall Street Journal survey's 2.2%), would strongly push the "YES" outcome, especially given some models like the Atlanta Fed's GDPNow suggested 4.2%. Conversely, a lower-than-expected estimate, particularly if it falls below 2.2% or indicates economic contraction, would be a strong bearish catalyst, boosting the "NO" outcome. Beyond the direct GDP release, other key economic indicators will influence market probabilities. A robust January 2026 Employment Report, released on February 6, 2026, showing strong job creation, low unemployment, and solid wage growth, would signal underlying economic strength supportive of higher GDP. Similarly, favorable December 2025 Personal Income and Outlays / PCE data, released concurrently with the GDP report on February 20, 2026, indicating healthy consumer spending and contained inflation, could reinforce a positive outlook. Conversely, a weak employment report or unfavorable PCE data (weak spending or high inflation) would suggest economic headwinds, potentially leading to downward revisions in GDP expectations and favoring the "NO" position.
Key Dates & Catalysts
- Expiration: May 01, 2026
- Closes: February 20, 2026
11. Decision-Flipping Events
- Trigger: The most critical catalyst for the "US GDP growth in Q4 2025?" prediction market will be the release of the advance estimate for Q4 2025 GDP by the U.S [^] .
- Trigger: Bureau of Economic Analysis (BEA) on February 20, 2026 [^] .
- Trigger: A significantly higher-than-expected figure, exceeding the market consensus of around 2.5% (or the Wall Street Journal survey's 2.2%), would strongly push the "YES" outcome, especially given some models like the Atlanta Fed's GDPNow suggested 4.2% [^] .
- Trigger: Conversely, a lower-than-expected estimate, particularly if it falls below 2.2% or indicates economic contraction, would be a strong bearish catalyst, boosting the "NO" outcome [^] .
13. Historical Resolutions
Historical Resolutions: 50 markets in this series
Outcomes: 26 resolved YES, 24 resolved NO
Recent resolutions:
- KXGDP-25OCT30-T4.0: NO (Oct 30, 2025)
- KXGDP-25OCT30-T3.5: YES (Oct 30, 2025)
- KXGDP-25OCT30-T3.0: YES (Oct 30, 2025)
- KXGDP-25OCT30-T2.5: YES (Oct 30, 2025)
- KXGDP-25OCT30-T2.0: YES (Oct 30, 2025)
Get Real-Time Research Updates
Sign up for early access to live reports, historical data, and AI-powered market insights delivered to your inbox.
