US GDP rose at slower-than-forecast 1.4% pace last quarter
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The weak quarterly US results were below all forecasts in a Bloomberg survey of economists.
PHOTO: REUTERS
NEW YORK – The US economy grew less than expected at the end of 2025, dragged down by a record-long government shutdown, consumer spending and trade.
Inflation-adjusted gross domestic product (GDP) increased an annualised 1.4 per cent in the fourth quarter of 2025 after rising 4.4 per cent in the prior period, according to the government’s initial estimate on Feb 20. Overall, the economy expanded 2.2 per cent in 2025, data from the US Bureau of Economic Analysis (BEA) showed.
The weak quarterly results – which were below all forecasts in a Bloomberg survey of economists – came as the US government was shut down for almost half of the three-month period
Less than an hour before the data was released, US President Donald Trump posted on social media that the shutdown would cost the US “at least two points in GDP”.
Despite the year-end slowdown, the data still capped a solid year for the US economy, which shrank in the first quarter amid a monumental pre-tariff surge in imports, only to round out 2025 with one of the strongest growth rates in years.
The turnaround came after Mr Trump backed off from his most punitive tariffs and the US Federal Reserve lowered interest rates, helping drive the stock market to record highs and enabling wealthier Americans to keep spending.
Mr Trump reclaimed the White House in 2025 with a vow to deliver a “golden age” for the US
Separate monthly BEA data out on Feb 20 showed the Fed’s preferred measure of underlying inflation – known as the core personal consumption expenditures price index – rose 0.4 per cent in December, the most in nearly a year. On an annual basis, the core personal consumption expenditures price index, which excludes food and energy, climbed 3 per cent, compared with 2.8 per cent at the start of 2025. BLOOMBERG
