US GDP growth slows to 1.4% in Q4, misses estimates; Donald Trump blames government shutdown
The world’s largest economy expanded at an annualised rate of 1.4 per cent in the October–December quarter, the US Department of Commerce said, significantly below analysts’ forecast of 2.5 per cent growth for the period, reported AFP.For the full year, GDP growth came in at 2.2 per cent in 2025, lower than the 2.8 per cent recorded in the previous year, according to the data.Trump was quick to blame last year’s prolonged government shutdown for the slowdown, holding Democratic lawmakers responsible in a Truth Social post issued shortly before the figures were released.“The Democrat Shutdown cost the U.S.A.
at least two points in GDP,” Trump wrote in an angry post about half an hour before the official results were published.He also criticised the Federal Reserve, targeting outgoing chairman Jerome Powell and calling for “LOWER INTEREST RATES.”Analysts generally expect the economic impact of the record-long shutdown — which lasted from October to mid-November –to be temporary.The Commerce Department said slower fourth-quarter growth “reflected downturns in government spending and exports and a deceleration in consumer spending,” though this was partly offset by a pick-up in investment.The fourth-quarter expansion marked a sharp slowdown from the 4.4 per cent growth recorded in the July–September period.The report noted that consumer spending and investment supported overall economic activity during the year, with household consumption continuing to drive growth despite persistent inflation pressures and a softer labour market.However, many Americans, particularly middle- and lower-income households, have become increasingly price-conscious, turning to warehouse retailers as they tighten budgets.While investments linked to artificial intelligence and spending by wealthier households have supported economic expansion, questions remain over how broadly the benefits are being felt across income groups.In a separate release on Friday, government data showed the Federal Reserve’s preferred inflation gauge also rose slightly more than expected.
The personal consumption expenditures (PCE) price index increased 2.9 per cent year-on-year in December, above economists’ expectations of 2.8 per cent and higher than the November reading.
