ECONOMY

U.S. Q4 Growth Cools to 1.4% After Shutdown

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WASHINGTON The U.S. economy expanded at a 1.4 percent annual rate in the fourth quarter, the Commerce Department reported Friday, missing the 2.5 percent projection and following a 4.4 percent third-quarter gain. Full-year 2025 GDP rose 2.2 percent. Officials attributed the slowdown to declines in federal spending, weaker exports and softened consumer purchases, and noted that the autumn government shutdown reduced output by an estimated portion of the quarter. December inflation readings showed renewed upward pressure. Most analysts expect some activity trimmed by the shutdown to rebound in the current quarter. Based on 6 articles reviewed and supporting research.

Prepared by Christopher Adams and reviewed by editorial team.

Timeline of Events

October–mid-November 2025: Federal government shutdown halts operations and delays data.
December 2025: Consumer spending slows; PCE inflation shows a 0.4% increase for December.
January–February 2026: Analysts finalize assessments of shutdown economic drag and inflation trends.
20 February 2026: BEA/Commerce release shows Q4 GDP at 1.4% annualized and full-year 2025 GDP at 2.2%.
Late February 2026: Economists and policymakers evaluate likely Q1 rebound and monetary policy implications.

Why This Matters to You

The economy's slowdown can affect your wallet. You might see prices rise due to inflation. If you're planning big purchases or investments, keep an eye on these trends. It's a good time to review your budget.

The Bottom Line

The Q4 economic growth dip isn't great, but it's not a disaster. Most analysts expect a rebound in the current quarter. Remember, the economy ebbs and flows. Worth forwarding if you know someone making financial decisions soon.