US Economy Grows Sluggish 0.5% in Q4 2025 Following Government Shutdown
The U.S. economy expanded at a sluggish annual pace of 0.5% in the fourth quarter of 2025, according to a final estimate released by the Commerce Department. This figure represents a downgrade from the previous estimate of 0.7% and marks a significant deceleration from the robust growth seen in earlier quarters of 2025. The slowdown was primarily driven by a 43-day government shutdown last fall, which caused federal government spending and investment to plummet by 16.6%, subtracting 1.16 percentage points from GDP growth. While consumer spending grew by 1.9%, it remained below previous levels. For the full year of 2025, economic growth totaled 2.1%, slower than the preceding two years. Looking ahead, the economic outlook remains uncertain due to rising energy prices and global commerce disruptions stemming from the U.S.-Israeli war with Iran. Additionally, the job market showed volatility in early 2026 despite adding jobs in January and March.
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US Economy Grows Sluggish 0.5% in Q4 2025 Following Government Shutdown
The U.S. economy expanded at a sluggish annual pace of 0.5% in the fourth quarter of 2025, according to a final estimate released by the Commerce Department. This figure represents a downgrade from the previous estimate of 0.7% and marks a significant deceleration from the robust growth seen in earlier quarters of 2025. The slowdown was primarily driven by a 43-day government shutdown last fall, which caused federal government spending and investment to plummet by 16.6%, subtracting 1.16 percentage points from GDP growth. While consumer spending grew by 1.9%, it remained below previous levels. For the full year of 2025, economic growth totaled 2.1%, slower than the preceding two years. Looking ahead, the economic outlook remains uncertain due to rising energy prices and global commerce disruptions stemming from the U.S.-Israeli war with Iran. Additionally, the job market showed volatility in early 2026 despite adding jobs in January and March.
AP News