Economy lost steam in fourth quarter during shutdown

US economic growth slowed sharply at the end of last year, dragged down by a record-long government shutdown and softer consumer spending.

The Commerce Department said the gross domestic product rose at a 1.4% seasonally and inflation-adjusted annual rate in the fourth quarter, well below the 2.5% economists expected and down from a 4.4% pace in the third quarter.

For 2025, the economy expanded 2.2% from the fourth quarter a year earlier, marking the slowest growth since 2022. Measured year over year, output also rose 2.2%, down from 2.8% in 2024 and the weakest pace since the 2020 contraction.

Ahead of the report’s release, President Donald Trump wrote on social media that the shutdown “cost the U.S.A. at least two points in GDP” and urged, “No Shutdowns! Also, LOWER INTEREST RATES.”

The report—delayed by the 43-day shutdown—underscores a jobless economic expansion and a “K-shaped” economy, with higher-income households faring well while lower-income consumers struggle with tariff-driven inflation and slowing wage growth.