Economy, weather, and CO₂

U.S. macroeconomics
This month’s forecast assumes that real GDP will grow at an annualized rate of 1.8% in 2025 and 2.4% in 2026. The 2025 forecast is an upward revision of more than 0.1 percentage points from last month. The forecast increased as real GDP growth in the second quarter of 2025 (2Q25) was revised higher and real consumer spending increased in both July and August after stalling in the first half of the year. The U.S. Bureau of Economic Analysis’s (BEA) Third Estimate of 2Q25 GDP, released on September 25 (after the macroeconomic assumptions were finalized), showed that GDP grew at an annualized rate of 3.8% in 2Q25, 0.5 percentage points above the Second Estimate. All else equal, this report will likely result in another upward revision to 2025 GDP growth in next month’s forecast.

The macroeconomic assumptions in the STEO are based on S&P Global’s macroeconomic model. We incorporate STEO energy price forecasts into the model to obtain the final macroeconomic assumptions.

Emissions
We forecast U.S. energy-related carbon dioxide (CO₂) emissions to increase by 1.8% in 2025, followed by a decrease of 0.7% in 2026. The largest changes in emissions for both years are attributable to shifting coal consumption for power generation.

We assume the population continues to grow in both 2025 and 2026. It follows from our emissions forecast that CO₂ per capita will rise in 2025 and fall in 2026.

Weather
As we transition into the winter months, we assume cooler temperatures in the fourth quarter of 2025 compared with the same period in 2024 to contribute to 9% more heating degree days (HDDs) in 2025 compared with 2024. Based on our current forecasts and data from the National Oceanic and Atmospheric Administration, our forecast assumes the United States will experience a cooler October this year compared with last, with about 220 heating degree days (HDDs) in October, 19% more HDDs than in October 2024, but the same HDDs than the 10-year monthly average.

Overall, our forecast assumes the 2025–2026 winter heating season (November–March) will be cooler than the previous winter season with a total of 3,150 HDDs (3% more HDDs), increasing energy use for space heating this winter. Our expectations for energy expenditures for the 2025–2026 winter season are outlined in our Winter Fuels Outlook, which will be released on October 15.