US GDP Slowed to 1.4% in Last Quarter of 2025

Constrained by a record 43-day federal government shutdown, U.S. economic growth slowed in the last three months of 2025 with real gross domestic product (GDP) rising only 1.4%, according to a delayed report released Friday by the Bureau of Economic Analysis. 

Growth in GDP – the value of all goods and services produced by the economy – declined sharply in Q4 compared to the 4.4% rate of growth in Q3 during the summer. 

The federal government shutdown, which lasted from Oct. 1 to Nov. 12, caused a short-term drag on the economy because hundreds of thousands of federal workers and contractors went unpaid, affecting household spending and business cashflow, and leading some companies to postpone hiring and investment. 

In Q4, increases in consumer spending and investments were partly offset by decreases in government spending and exports. Consumer spending activity reflected an increase in services such as healthcare that offset a decrease in goods. The artificial intelligence boom drove an increase in business investments. 

Viewed on an annual basis, the real GDP increased 2.2% for all of 2025, down from the 2.8% real GDP increase recorded for the year 2024. The 2025 real GDP showed the weakest economic growth since 2020 during the pandemic. 

Read the full article from the NJ Business Industry Association (NJBIA).