Connecticut’s economy slowed sharply in the fourth quarter of 2025, growing at the same pace as the nation, according to new data from the U.S. Bureau of Economic Analysis.
The state’s real gross domestic product, which measures the value of all goods and services produced in Connecticut, increased at a 0.5% annual rate in the October-through-December period, matching U.S. growth.
That’s a significant drop from the third quarter, when Connecticut’s economy grew at a 5.6% annual rate — ranking fourth nationally — compared with 4.4% growth for the U.S.
For the full year, Connecticut’s economy grew 2.4% in 2025, ranking 12th among all states.
Overall, GDP increased in 35 states in the fourth quarter, while others saw flat or declining output. Growth ranged from 3.8% in North Dakota to a decline of 8.3% in the District of Columbia.
An industry breakdown shows growth in Connecticut was driven by the private sector, particularly information, wholesale trade and health care. Durable-goods manufacturing also posted gains, offsetting a decline in nondurable goods, according to the BEA.
Several sectors contracted, including finance and insurance, transportation and warehousing, and accommodation and food services.
Meantime, fourth-quarter personal income in Connecticut grew 3.8%, up from 2.9% in the third quarter. U.S. personal income increased 3.4% in the fourth quarter.
Separately, recent labor data showed the state’s job market cooled in 2025, as employers added a net 1,200 jobs while the labor force shrank by nearly 12,000 people.
More recently, employers added 5,300 jobs in January, pushing total employment to a record level, even as the unemployment rate edged up to 4.5%.
State officials have described the outlook as “slow and steady,” with hiring continuing despite ongoing economic uncertainty.