US GDP growth slows to 1.4% in Q4, misses expectations; Trump blames shutdown
The US GDP rose by 1.4% in Q4, down from previous quarters, due to reduced government and consumer spending. Despite solid growth, job creation remains low, and consumer confidence has declined, reflecting a mixed economic outlook.
The gross domestic product (GDP) of the United States rose at a 1.4% annual rate in the fourth quarter, the Commerce Department reported Friday, down from 4.4% in the July-September quarter and 3.8% in the quarter before that, AP reported.
A drop in government and consumer expenditure contributed to the slowdown, the government said. Consumer spending increased by only 2.2%, a marked deceleration from the healthy 3.5% rise in the third quarter.
Blaming the shutdown and Federal Reserve Chair Jerome Powell for the GDP data, US President Donald Trump on Truth Social said, "The Democrat Shutdown cost the U.S.A. at least two points in GDP. That’s why they are doing it, in mini form, again. No Shutdowns! Also, LOWER INTEREST RATES. “Two Late” Powell is the WORST!"
What do job numbers reflect?
The report highlights an unusual feature of the US economy that it is expanding steadily but generating few new jobs. In 2025, growth reached a solid 2.2%, yet last week’s government report revealed that employers created fewer than 200,000 jobs, the lowest figure since the COVID pandemic began in 2020.
Economists cited by the news portal identify several reasons for the gap, including the Trump administration’s strict immigration policies, which have significantly slowed population growth and decreased the pool of available workers. This partly explains why the unemployment rate only increased slightly to 4.3% from 4% despite minimal hiring.
Some companies might hesitate to add jobs due to uncertainty about whether artificial intelligence will allow them to increase production without hiring new staff. Additionally, the cost of tariffs has decreased profits for many businesses, potentially causing them to reduce their hiring.
Consumers remain pessimistic
The economy is unusual at the moment because growth remains steady, inflation has decreased slightly, and unemployment is low. However, it was indicated that Americans are mostly pessimistic about the economy. In January, a consumer confidence index dropped to its lowest point since 2014, yet consumer spending has continued strong, driving economic growth.
Part of that spending is likely disproportionately influenced by upper-income consumers, a pattern referred to as the “K-shaped” economy. However, data from various large banks indicates that lower-income consumers continue to increase their spending, albeit at a slower pace.
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