U.S. GDP Growth Slows to 1.4% in Q4 2025

The U.S. economy expanded at a slower pace in the final quarter of 2025, with gross domestic product increasing at a 1.4 percent annual rate from October through December, according to the Commerce Department. The slowdown, reported on Friday, marked a sharp deceleration from the 4.4 percent growth in the third quarter and 3.8 percent in the second quarter, primarily due to the 43-day federal government shutdown and a moderation in consumer spending.

The shutdown, the longest in U.S. history, furloughed hundreds of thousands of federal workers and disrupted government services, reducing output by an estimated 1 percentage point in the fourth quarter. Economists anticipate a rebound in early 2026 as back pay is distributed and deferred spending resumes, potentially offsetting much of the temporary drag. Consumer spending, which accounts for about two-thirds of economic activity, rose at a 2.4 percent annual rate, down from a robust 3.5 percent in the prior quarter. This pullback contributed significantly to the overall deceleration, though spending remained a key driver of growth.

For the full year of 2025, GDP grew 2.2 percent, a respectable but slower pace compared to 2.3...