WASHINGTON—Economic growth in the U.S. slowed during the fourth quarter of 2025, with the record-long government shutdown and slower consumer spending dragging on performance.
According to the Commerce Department, U.S. gross domestic product (GDP) increased at a 1.4% seasonally and inflation adjusted annual rate during Q4. The numbers were below what many economists had been projecting.
“Bureau of Economic Analysis estimated that the shutdown shaved off a full percentage point of growth during the quarter, but that should be substantially repaid in the first quarter of 2026, which is poised for a strong reading,” America’s Credit Unions Chief Economist Curt Long said in a statement. “On the flip side, because furloughed employees received back pay in the fourth quarter, the prices paid for government services soared, which placed yet more upward pressure on PCE inflation.
“Overall, growth conditions are solid and inflation is still above the FOMC’s target, so there is not an obvious need for a rate cut,” Long continued. “Credit unions continue to play a critical role in addressing persistent inflation by offering the most affordable financial services in the market.”
Overall Performance
Overall, in 2025, the economy grew 2.2%, measured from the fourth quarter of the prior year, which was below the 2.4% growth in 2024 and the weakest since 2022.
