U.S. economic growth slowed more than anticipated in the fourth quarter. Disruptions from last year's government shutdown and moderating consumer spending contributed to the slowdown. Gross domestic product increased at a 1.4 percent annualized rate last quarter, significantly below the 3.0 percent pace economists had forecast.
The economy had grown at a 4.4 percent pace in the third quarter. The government shutdown was estimated to have subtracted 1.5 percentage points from fourth-quarter GDP. While most lost output is expected to be recovered, some will not.
President Trump commented on social media that the shutdown cost the U.S. at least two points in GDP. He also called for lower interest rates.
The report also highlighted a jobless economic expansion and a "K-shaped" economy, where upper-income households fare well while lower-income consumers struggle with inflation and stalling wage growth. Job growth last year was the slowest outside the pandemic since the 2009 Great Recession.
Consumer spending slowed, primarily driven by higher-income households, at the expense of savings as inflation eroded buying power. However, economists anticipate larger tax refunds this year due to tax cuts. Artificial intelligence is also credited with accounting for a significant portion of GDP growth in the first three quarters of 2025, partially offsetting negative impacts.