GDP growth sharply slows to 1.4%, less than half of fourth quarter expectations | Fortune

"U.S. economic growth slowed in the final three months of last year, dragged down by the six-week shutdown of the federal government and a pullback in consumer spending. The nation's gross domestic product - the output of goods and services - increased at a 1.4% annual rate in the fourth quarter, the Commerce Department reported Friday, down from 4.4% in the July-September quarter and 3.8% in the quarter before that."

"Economists point to several possible reasons for the gap: The Trump administration's crackdown on immigration has sharply slowed population growth, reducing the number of people available to take jobs. It's one reason that the unemployment rate rose only slightly - to 4.3% from 4% - last year, even with the nearly non-existent hiring. Some businesses may also be holding back on adding jobs out of uncertainty about whether artificial intelligence will enable them to produce more without finding new employees."

"The economy is also unusual right now because growth is solid, inflation has slowed a bit, and unemployment is low, but surveys show that Americans are generally gloomy about the economy. In January, a measure of consumer confidence fell to its lowest level since 2014, yet consumers have kept spending, propelling growth. Some of that spending may be disproportionately driven by upper-income consumers, in a phenomenon known as the "K-shaped" economy. Yet data from many large banks suggests lower-income consumers are still raising their spendin"

U.S. GDP growth dropped to a 1.4% annual rate in the fourth quarter after a six-week federal government shutdown and weaker consumer spending. Consumer spending rose 2.4%, slowing from 3.5% in the prior quarter. Annual growth was 2.2% in 2025 despite employers adding fewer than 200,000 jobs, the lowest since 2020, and unemployment rising to 4.3%. Factors cited include slower population growth from immigration restrictions, business caution amid AI uncertainty, and tariff-driven profit pressures. Consumer confidence fell to its lowest level since 2014, yet overall spending persisted, with gains concentrated among higher-income households.

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