The US economy grew at a slower pace than expected in the fourth quarter of 2025.
New data from the Bureau of Economic Analysis published on Friday showed the economy grew at an annualized rate of 1.4% in the final three months of 2025. Economists had expected GDP to grow at an annualized rate of 2.9% in the fourth quarter.
Friday’s report had been set for release on Jan. 29, but data collection was delayed by the shutdown that covered all of October and parts of November.
In a post on Truth Social ahead of the report, President Trump said the government shutdown that lasted 43 days back in the fall cost the US economy “at least two points in GDP.” The president also again called for lower interest rates.
In its release, the BEA said, “Compared to the third quarter, the deceleration in real GDP in the fourth quarter reflected downturns in government spending and exports and a deceleration in consumer spending that were partly offset by an acceleration in investment.”
Underlying spending trends, however, remained solid, with real final sales to private domestic purchasers — the sum of consumer spending and gross private fixed investment — increasing 2.4% in the fourth quarter, compared with 2.9% in the third quarter.
The report also continued to show the impact the AI buildout is having on economic growth, with spending on information processing equipment contributing 0.65 percentage points to economic growth in the quarter.
Government spending fell at an annualized rate of 5.1% in the fourth quarter, which took 0.9 percentage points off the headline growth rate.
For the year, the US economy grew 2.2%, a modest slowdown from the 2.8% growth seen in 2024.
This is breaking news. More to come.
Click here for the latest economic news and indicators to help inform your investing decisions
Read the latest financial and business news from Yahoo Finance