US GDP Growth Slows to 1.4% in Q4, Missing Estimates; Trump Points to Government Shutdown

US economic growth decelerated sharply in the final quarter of 2025, coming in at 1.4% – significantly below analyst expectations. The slowdown caps the first year of Donald Trump’s second presidency, and the Republican leader has swiftly attributed the deceleration to the impact of last year’s lengthy government shutdown, placing blame on Democratic lawmakers.

GDP Figures and Analyst Expectations

The Department of Commerce reported that the US economy expanded at an annual rate of 1.4% in the October to December period. This figure falls considerably short of the 2.5% growth pace that economists had predicted. Full-year GDP growth for 2025 registered at 2.2%, a decline from the 2.8% recorded in the prior year.

Trump’s Response and Federal Reserve Criticism

Prior to the official release of the data, President Trump took to his Truth Social platform to criticize the shutdown’s effect on the economy, stating, “The Democrat Shutdown cost the USA at least two points in GDP.” He too reiterated his criticism of the Federal Reserve, specifically targeting outgoing Chairman Jerome Powell and calling for lower interest rates.

Shutdown’s Impact and Contributing Factors

Analysts generally anticipate that the economic impact of the 43-day government shutdown, which spanned from October to mid-November, will be temporary. However, the Commerce Department indicated that the slower fourth-quarter growth “reflected downturns in government spending and exports and a deceleration in consumer spending.” This was partially offset by an increase in investment.

Broader Economic Trends

The fourth-quarter figure represents a marked slowdown from the 4.4% growth observed in the July to September period. Despite the recent deceleration, the US economy has demonstrated solid growth in recent months, driven by consumer spending. However, increasing numbers of Americans, particularly those in middle and lower-income brackets, are becoming more price-conscious and are turning to warehouse stores to manage their budgets.

Inflationary Pressures

A separate government report released on the same day revealed that the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) price index, rose by 2.9% year-over-year in December. This figure exceeded both economists’ expectations of 2.8% and the November reading.

Looking Ahead

The combination of slowing GDP growth and rising inflation presents a complex economic landscape. Even as the long-term effects of the government shutdown remain to be seen, the data suggests a potential shift in economic momentum as the US enters 2026.