US economy slowed sharply in the fourth quarter, expanding at a rate of just 1.4%
The US economy grew at a much slower pace in the final months of 2025 as the historic government shutdown weighed on economic activity, ending a year that saw the weakest growth since the pandemic.
Still, it was far from the worst-case scenario economists feared when President Donald Trump unveiled his sweeping tariffs last spring. The economy grew in 2025, despite tariffs, an aggressive clampdown on immigration and one of the weakest stretches of job creation since the Great Recession, largely thanks to wealthy consumers who continued to spend.
Gross domestic product, which measures all the goods and services produced in the economy, registered at an annualized rate of 1.4% from October through December, the Commerce Department said Friday. That’s a marked slowdown from the 4.4% rate in the third quarter, and lower than the 1.9% rate economists projected in a poll by data firm FactSet. GDP is adjusted for seasonal swings and inflation.
Overall, the economy grew by 2.2% in 2025, the slowest pace since 2020.
Stephanie Roth, chief economist at Wolfe Research, told CNN that last year’s slower growth, compared to prior years, was “great given how much labor supply is down.”
“You could call it ‘Goldilocks,’” she said.
Still, it was far from the worst-case scenario economists feared when President Donald Trump unveiled his sweeping tariffs last spring. The economy grew in 2025, despite tariffs, an aggressive clampdown on immigration and one of the weakest stretches of job creation since the Great Recession, largely thanks to wealthy consumers who continued to spend.
Gross domestic product, which measures all the goods and services produced in the economy, registered at an annualized rate of 1.4% from October through December, the Commerce Department said Friday. That’s a marked slowdown from the 4.4% rate in the third quarter, and lower than the 1.9% rate economists projected in a poll by data firm FactSet. GDP is adjusted for seasonal swings and inflation.
Overall, the economy grew by 2.2% in 2025, the slowest pace since 2020.
Stephanie Roth, chief economist at Wolfe Research, told CNN that last year’s slower growth, compared to prior years, was “great given how much labor supply is down.”
“You could call it ‘Goldilocks,’” she said.
