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2026-02-20 22:35:27
[Government shutdown drags down US GDP growth in Q4] The US economy slowed significantly in the fourth quarter due to the record government shutdown in the fall of 2025 and weak consumption. (1) The US Department of Commerce announced on Friday that real GDP grew at an annualized rate of 1.4% in the fourth quarter of 2025, far below Wall Street’s expectation of 2.5%, and a significant slowdown from the high growth rate of 4.4% in the third quarter. Federal government spending fell sharply by 16.6% in the quarter. (2) For the whole year, the US economy is expected to grow by 2.2% year-on-year in 2025, lower than 2.4% in 2024, the weakest since 2022; on a year-on-year basis of total output, the growth rate is 2.2%, also lower than 2.8% in 2024. (3) The Department of Commerce said that the impact of the government shutdown from October 1 to November 12 “cannot be fully quantified”, but the contraction of federal services alone lowered the real GDP growth rate by about 1 percentage point in the quarter. (4) Before the data was released, Trump accused the Democrats on social media of creating a shutdown and damaging GDP, and again criticized Federal Reserve Chairman Powell for not cutting interest rates enough.
