US GDP Growth Slows to 0.7 Percent as Shutdown Cuts Deep
Key Takeaways
- Q4 2025 real GDP growth at 0.7% annual rate, slower than expected.
- BEA's revision downgraded quarterly growth from prior estimates.
- 43-day government shutdown weighed on fourth-quarter economic activity.
GDP Growth Revised Down
The US economy grew at a 0.7 percent annual rate, less than half the previously estimated 1.4 percent.
“Close × Q4 GDP Second Estimate: Real GDP at 0”
The 43-day government shutdown cut federal spending at a 16.7 percent rate.
Consumer spending rose at just 2 percent, down from 3.5 percent.
Business investment increased 2.2 percent, likely reflecting AI-related spending.
Shutdown Drags GDP
The shutdown was the biggest factor in the revision.
Federal government spending plunged at a 16.7 percent rate.
The total impact cut the growth figure in half.
Political dysfunction can have real economic costs.
Year-End Growth
The US economy grew 2.1 percent in 2025, down from 2.8 percent in 2024.
The slowdown raises questions about how sustainable the AI-driven rebound will be.
Private consumption and investment remain positive forces.
Global Context
Infobae noted the persistent fragility of global economic performance.
France wrestled with inflation, and the UK's GDP data showed fluctuations.
The US functions as an international benchmark for trade and financial flows.
US developments reverberate globally.
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