U.S. GDP Growth Slows to 1.4% in Q4 2025 as Shutdown Cuts Spending
Feb 22nd 2026
Economic growth came in well below forecasts as the record federal shutdown and weaker consumer spending weighed on the quarter, while the Fed's preferred inflation gauge stayed above target.
- Gross domestic product rose at a 1.4% annualized rate in Q4, below the 2.5% Dow Jones estimate.
- The Commerce Department estimated the government shutdown subtracted about one percentage point from Q4 growth.
- Consumer spending slowed to a 2.4% annualized pace and exports fell 0.9% for the quarter.
- Federal government spending tumbled 16.6% and overall government spending fell 5.1% in Q4.
- Core PCE, the Fed's preferred inflation measure, rose 3% year over year in December and both PCE indexes rose 0.4% month to month.
- Final sales to private domestic purchasers increased 2.4% in Q4, signaling underlying demand despite the headline slowdown