Consumer spending still leading U.S. economic growth; Quad Cities business leaders expect increased hiring

U.S. real gross domestic product increased 1.4% (seasonally adjusted annual rate), pulled down by the lapse in federal government appropriations. Trade and inventory fluctuations diminished somewhat from early in the year, allowing consumer spending to take the spotlight as the largest contributor to GDP growth. U.S. nonfarm payroll employment growth slowed in 2025, which is unusual given the strong GDP growth. Both supply and demand factors may be causing this anomalous behavior in the labor market.

In the Quad Cities area, the labor market was stable during the 4th quarter following declines in 2024 and early 2025. Our Business Outlook Survey showed that respondents were significantly more optimistic about the potential for growth in the U.S. economy than respondents to our November survey were. Respondents also noted expectations of increased hiring, increased wages, higher prices and more capital expenditures. Even so, survey respondents expressed concern about the availability of qualified employees. Job posting data for the Quad Cities backs up the survey data indicating increased labor market activity in the region.

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