Fourth-quarter U.S. GDP up just 1.4%, badly missing estimate; inflation firms at 3%
Source: CBS News
Published Fri, Feb 20 2026 8:31 AM EST Updated 15 Min Ago
U.S. growth slowed more than expected near the end of 2025 as the government shutdown impacted spending and investment, while a key inflation metric showed high prices are still a factor for the economy, according to data released Friday. Gross domestic product rose at an annualized rate of just 1.4%, according to the Commerce Department, well below the Dow Jones estimate for a 2.5% gain.
Consumer spending rose at a slower pace for the period while government spending tumbled sharply in a quarter marked by the record-length shutdown. The department estimated that the shutdown subtracted about 1 percentage point from growth, though it added that the exact impacts “cannot be quantified.”
For the full year in 2025, the U.S. economy grew at a 2.2% pace, down from the 2.8% increase in 2024.
“The Federal government shutdown clearly sent the economy careening off its strong growth path in the fourth quarter which is a one-off that won’t be repeated in early 2026,” said Chris Rupkey, chief economist at Fwdbonds. Just prior to the data release, President Donald Trump warned that the GDP number would be soft, blaming it on the government shutdown that ended in November.
Read more: https://www.cnbc.com/2026/02/20/pce-inflation-december-2025.html
NO. The problem is not the government shutdown. These figures reflect economic activity BEFORE the shutdown. These figures show the impact of Trump’s tariffs, his blocking federal funds for construction and other projects, and a gradual slowdown in consumer spending.












