Let's break down the GDP numbers to see what had happened.
GDP growth = G + I + C + NE
Q4 GDP (1st estimate) = (-0.9) + 0.66 + 1.58 + 0.08 = 1.42 (1.4)
Q4 GDP (2nd estimate) = (-1.03) + 0.57 + 1.33 + (-0.22) = 0.65 (0.7)
It seems that the US has been fudging its GDP number because the latest GDP estimation has crashed by 50% from 1.4% to 0.7%.
We can see that all the GDP components have fallen from the 1st estimation.
Moreover, the US core inflation (MOM) has remained at a high of 0.4% for the 2nd month while the core inflation (YOY) is showing an upward trend (see below). If we continue to see a weakening US GDP and an ever rising US inflation, the US will encounter a stagflation in 2026.
US core inflation (YOY): 3.1%
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