U.S. Economic Growth Slowed in Fourth Quarter, Weighed Down By Government ShutdownJohn Carney 20 Feb 2026
The U.S. economy expanded at a 1.4 percent annual rate in the fourth quarter of 2025, with the October-November government shutdown subtracting approximately one percentage point from growth, according to the Bureau of Economic Analysis’s advance estimate released Friday.
Without the shutdown, the economy would have grown at roughly 2.4 percent, still a deceleration from the third quarter’s blistering 4.4 percent pace, but a more modest slowdown. The report underscores how the 43-day government closure weighed on economic activity even as the private sector continued to expand.
Consumer spending and business investment drove the quarter’s growth, while an improving trade balance also contributed positively. The composition suggests the economy is rebalancing away from government-led expansion toward private sector-driven growth.
“The full effects of the partial federal government shutdown on the fourth-quarter estimates cannot be quantified because they are embedded in the regular source data,” the BEA noted, but estimated that the reduction in federal employee services alone subtracted about 1.0 percentage point from real GDP growth.
President Trump, writing on his Truth Social account, estimated that the shutdown subtracted two points from GDP. He also called on the Federal Reserve to lower interest rates.
Federal government spending plunged at a 16.6 percent annual rate in the fourth quarter, with both defense and nondefense consumption falling sharply. Because furloughed federal employees ultimately received back pay, the shutdown had no impact on current-dollar federal compensation, instead showing up as a temporary increase in the prices paid for federal employee services.
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https://www.breitbart.com/economy/2026/02/20/u-s-economic-growth-slowed-in-fourth-quarter-weighed-down-by-government-shutdown/
