US Economy Grows at 1.4% in Q4, Slower Than Expected

Shutdown and consumer pullback contribute to slower growth to end 2025

Published on Feb. 28, 2026

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The U.S. economy grew at a 1.4% annual rate in the fourth quarter of 2025, slower than expected, as the six-week federal government shutdown and a pullback in consumer spending weighed on growth, according to the Commerce Department.

Why it matters

The slower-than-expected economic growth in the final quarter of 2025 raises concerns about the overall health of the U.S. economy and its ability to maintain momentum heading into 2026. The government shutdown and consumer spending decline are seen as temporary factors, but they highlight the economy's vulnerability to external shocks.

The details

The nation's gross domestic product (GDP) - the broadest measure of economic output - grew at a 1.4% annual rate in the October-December quarter, down from 3.2% in the third quarter. The shutdown, which began on December 22 and lasted until January 25, disrupted economic activity and weighed on consumer spending, which accounts for about 70% of U.S. economic output.

  • The U.S. economy grew at a 1.4% annual rate in the fourth quarter of 2025.
  • The federal government shutdown lasted for six weeks, from December 22, 2025 to January 25, 2026.

The players

U.S. Commerce Department

The government agency responsible for tracking and reporting on U.S. economic data, including GDP growth.

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What’s next

Economists will be closely watching the U.S. economy's performance in the first quarter of 2026 to see if the slowdown in Q4 2025 was a temporary blip or the start of a broader economic downturn.

The takeaway

The slowdown in U.S. economic growth at the end of 2025 highlights the economy's vulnerability to external shocks like government shutdowns and consumer spending pullbacks, underscoring the need for policymakers to address these risks and maintain a healthy, resilient economy.