Economy Expanded At Sluggish 0.7% In Fourth Quarter, Government Says, Downgrading First Estimate

The U.S. economy, hobbled by past fall’s 43-day authorities shutdown, precocious astatine an unexpectedly sluggish 0.7% yearly complaint from October done December, nan Commerce Department reported Friday successful a large downgrade of its first estimate.

Growth successful gross home merchandise — nan nation’s output of equipment and services — was down sharply from 4.4% successful past year’s 3rd 4th and 3.8% successful nan second. And nan fourth-quarter number was half nan government’s first estimate of 1.4%; economists had expected nan revision to spell nan different measurement — and show stronger growth.

Federal authorities spending and investment, clobbered by nan shutdown, plunged astatine a 16.7% rate, hacking 1.16 percent points disconnected fourth-quarter turn

For each of 2025, GDP grew 2.1%, coagulated but down from an first estimate of 2.2% and from 2.8% successful 2024 and 2.9% 2023.

In nan 4th quarter, user spending grew astatine a 2% clip, down from 3.5% successful nan 3rd 4th and nan 2.4% nan authorities had initially estimated. Business investment, excluding housing, accrued astatine a patient 2.2% pace, apt reflecting money being poured into artificial intelligence, but nan summation was down from 3.2% successful nan 3rd 4th and from nan 3.7% beforehand successful nan Commerce department’s first estimate.

Exports fell astatine a 3.3% yearly complaint successful nan 4th quarter, a bigger driblet than nan authorities first estimated.

A class wrong nan GDP information that measures nan economy’s underlying spot came successful weaker than antecedently reported, increasing astatine a 1.9% clip, down from 2.9% successful nan 3rd 4th and from nan first estimate of 2.4%. This class includes user spending and backstage investment, but excludes volatile items for illustration exports, inventories and authorities spending.

The U.S. system — nan world’s largest — has shown astonishing resilience successful nan look of President Donald Trump’s policies, including sweeping import taxes and wide deportations. But nan warfare pinch Iran has driven up lipid and state prices and clouded nan economical outlook.

Meanwhile, nan American occupation marketplace is successful a slump. Last month, companies, nonprofits and authorities agencies trim 92,000 jobs. In 2025, they added less than 10,000 jobs a month, nan weakest hiring extracurricular recession years since 2002.

Friday’s GDP was nan 2nd of nan 3 estimates of fourth-quarter growth. The last study is owed April 9.

Wiseman writes for nan Associated Press.