GDP increases by 1.4% in fourth quarter, below estimates

The Commerce Department announced Friday the U.S.'s gross domestic product rose by 1.4% in the fourth quarter – below the Dow Jones estimate for a 2.5% gain.

Government spending dropped significantly in a quarter that included a record-length shutdown, while consumer spending increased at a slower pace, CNBC reported.

The Commerce Department estimated that the government shutdown subtracted about one percentage point from growth, though it added that the exact impacts “cannot be quantified.”

The U.S. economy grew at a 2.2% pace overall in 2025, down from the 2.8% increase in 2024.

“The Federal government shutdown clearly sent the economy careening off its strong growth path in the fourth quarter which is a one-off that won’t be repeated in early 2026,” said Chris Rupkey, chief economist at Fwdbonds.