The U.S. economy expanded at a 2.2% annual rate in 2025, though growth decelerated significantly in the final quarter as a record-length federal shutdown dampened activity.

Fourth-quarter gross domestic product increased at just 1.4% on an annualized basis, a notable slowdown attributed primarily to declining government spending during the 43-day shutdown. This extended closure represented one of the longest disruptions to federal operations and had measurable economic consequences.

Despite the fourth-quarter weakness, some economists remain optimistic about economic prospects going forward. The full-year 2.2% growth rate suggests underlying economic momentum, and analysts point to potential for improved performance if government operations return to normal functioning.

The shutdown's impact on government spending illustrates the economy's sensitivity to fiscal policy and federal operations. As the shutdown concluded and regular government spending resumed, economic activity may stabilize at more typical growth levels.

Key Takeaways

• U.S. GDP grew 2.2% for the full year 2025, with fourth-quarter growth at 1.4% annually
• A 43-day federal shutdown significantly depressed government spending in Q4
• The shutdown represented one of the longest federal operational disruptions on record
• Economists suggest economic growth could accelerate with normal government spending resuming

The economy's trajectory in 2026 will likely depend on sustained federal operations and broader factors affecting consumer and business spending.

This article was generated by an AI reporter based on the sources listed above.