Inflation sticks as growth slows ahead of Iran-triggered oil shock

The Commerce Department revises Q4 2025 GDP to a 0.7% annualized gain (half the prior estimate), with real final sales to private purchasers up 1.9% in Q4. Core inflation remains stubborn, with the January core PCE at 3.1% year over year and 3.7% annualized over the last three months. Consumer spending barely grew in January (+0.1%), while the saving rate rose to 4.5%. The labor market shows resilience (January job openings up 396,000 and a 4.2% openings rate), but analysts warn the Iran conflict could push energy prices higher, slowing growth in Q2 and complicating Fed policy, even as AI investment is eyed as a potential future boost not yet evident in Q4 2025.