US economy slows to 1.4 percent growth as government shutdown takes a heavy toll

U.S. growth slowed to 1.4 percent last quarter following a lengthy government shutdown. Resilient consumer spending remains while inflation stays elevated.

The US USUS Commerce Department (Bureau of Economic Analysis) released its advance estimate today, February 20, 2026, showing that real gross domestic product grew at an annualized rate of 1.4% in the fourth quarter of 2025. This reading marks an unexpectedly sharp slowdown relative to consensus forecasts, as the national economy faced significant headwinds from a reduction in public sector activity.
People shop at a Costco store in the Staten Island borough of New York City, U.S., on January 16, 2026. REUTERS/Brendan McDermid/File Photo
People shop at a Costco store in the Staten Island borough of New York City, U.S., on January 16, 2026. REUTERS/Brendan McDermid/File Photo
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