ECONOMY

US GDP Slows To 0.5% In Fourth Quarter

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Washington. The Commerce Department reported Thursday that the U.S. economy grew at a 0.5% annualized rate in the fourth quarter (October–December), revising down from a prior 0.7% estimate and attributing much of the slowdown to a 43-day federal government shutdown that cut spending. The revision reduced full-year 2025 growth to 2.1%, below 2024's 2.8% and 2023's 2.9%; federal spending and investment contracted 16.6% annualized, subtracting 1.16 percentage points from Q4 GDP, while consumer spending rose 1.9%; officials warned the outlook this year is uncertain amid higher energy prices.

Prepared by Christopher Adams and reviewed by editorial team.

Timeline of Events

April–June: U.S. GDP grew 3.8% annualized.
July–September: U.S. GDP accelerated to 4.4% annualized.
Last fall: A 43-day federal government shutdown reduced federal spending and investment.
October–December: Commerce Department revised Q4 GDP to 0.5% annualized, downgraded from 0.7%.
Full-year 2025: U.S. GDP growth recorded at 2.1%, below prior years.

Why This Matters to You

The slower GDP growth could affect your wallet. When the economy slows, it can lead to job cuts and lower wage growth. Higher energy prices could also mean higher bills. Keep an eye on your budget and spending.

The Bottom Line

The U.S. economy took a hit in Q4 due to the government shutdown and rising energy costs. The outlook for this year remains uncertain. Worth forwarding if you know someone concerned about the economy's direction.