Real GDP growth slowed significantly in the fourth quarter of 2025. The third estimate for national GDP reported an annualized growth rate of 0.5%, down from 4.4% in the third quarter. Arkansas growth slowed to 0.4% in the fourth quarter, declining from a 5.8% pace in the third quarter.
A breakdown of GDP by industry shows several sectors that contributed positively to fourth quarter growth, both nationally and here in Arkansas. Examples include Wholesale trade, Retail trade, and Health Care & Social Assistance. Sectors subtracting from growth included Nondurable Goods manufacturing and Federal government employment.
Another factor suppressing GDP growth for Arkansas was a decline in Agriculture, etc. component. Just as large swings in agricultural income have been creating volatility in Arkansas Personal Income growth rates, the output of the agriculture sector has been introducing noticeable fluctuations in real GDP growth as well. In terms of year-over-year growth rates, the agriculture sector had the effect of lowering Arkansas GDP growth in 2023 and boosting it in 2024. As of the fourth quarter of 2025, four-quarter growth for the U.S. was 2.0% and only 1.5% for Arkansas. Removing the agriculture sector from the Arkansas aggregate, the state’s non-agricultural GDP growth was 2.1%.
Longer-term trends show that Arkansas GDP growth has outpaced the U.S. over the past 6 years. Cumulative growth rates from 2019:Q4 forward show growth of 17.8% in Arkansas and 14.6 for the U.S. total.
