United States Q4 GDP Downgrade

The United States economy grew at a sluggish 0.5% annual pace in the fourth quarter, from October through December, according to the final estimate from the United States — United States Department of Commerce. This figure is a downgrade from the previous estimate of 0.7% and a sharp deceleration from the 4.4% and 3.8% growth rates in the preceding quarters. The primary reason for this slowdown was a 43-day government shutdown, which caused federal government spending and investment to fall by 16.6%, reducing Q4 GDP growth by 1.16 percentage points. Consumer spending also expanded at a slower pace of 1.9%. For the full year 2025, the United States economy grew 2.1%, slower than previous years. The economic outlook for 2026 remains uncertain due to the U.S.-Israeli war with Iran, which has driven up energy prices and disrupted global commerce. The job market in the United States also showed mixed signals, with weak hiring in 2025 and fluctuating numbers in early 2026.