Fourth-quarter U.S. GDP up just 1.4%, badly missing estimate; inflation firms at 3% [View all]
Last edited Fri Feb 20, 2026, 10:44 AM - Edit history (1)
Source: CBS News
Published Fri, Feb 20 2026 8:31 AM EST Updated 15 Min Ago
U.S. growth slowed more than expected near the end of 2025 as the government shutdown impacted spending and investment, while a key inflation metric showed high prices are still a factor for the economy, according to data released Friday. Gross domestic product rose at an annualized rate of just 1.4%, according to the Commerce Department, well below the Dow Jones estimate for a 2.5% gain.
Consumer spending rose at a slower pace for the period while government spending tumbled sharply in a quarter marked by the record-length shutdown. The department estimated that the shutdown subtracted about 1 percentage point from growth, though it added that the exact impacts “cannot be quantified.”
For the full year in 2025, the U.S. economy grew at a 2.2% pace, down from the 2.8% increase in 2024.
“The Federal government shutdown clearly sent the economy careening off its strong growth path in the fourth quarter which is a one-off that won’t be repeated in early 2026,” said Chris Rupkey, chief economist at Fwdbonds. Just prior to the data release, President Donald Trump warned that the GDP number would be soft, blaming it on the government shutdown that ended in November.
Read more: https://www.cnbc.com/2026/02/20/pce-inflation-december-2025.html
From the source -
Link to tweet
@BEA_News
The U.S. economy grew at a 1.4% annualized rate in Q4.
https://bea.gov/data/gdp/gross
-domestic-product
#GDP
8:30 AM · Feb 20, 2026
Link to tweet
@BEA_News
For all of 2025, the U.S. economy grew 2.2%.
https://bea.gov/data/gdp/gross
-domestic-product
#GDP
8:31 AM · Feb 20, 2026
Article updated.
Previous article/headline -
Economic growth slowed more than expected near the end of 2025 while inflation held firm, according to data released Friday that could complicate the Federal Reserve's path on interest rates. Gross domestic produce rose at an annualized rate of just 1.4%, according to Commerce Department numbers released Friday, well below the Dow Jones estimate for a 2.5% gain.
For the full year in 2025, the U.S. economy grew at a 2.2% pace, down from the 2.8% increase in 2024. At the same time, inflation held firm in December, according to the gauge most closely watched by Fed officials.
The core personal consumption expenditures price index, which excludes food and energy, rose 3% in December, according to a separate release. That matched the consensus forecast but kept the pivotal inflation measure well above the Fed's 2% target. On a headline basis, the PCE index accelerated 2.9%, or 0.1 percentage point higher than expected. Both indexes rose 0.4% for the month, compared to the respective forecasts for 0.3%.
Just prior to the data release, President Donald Trump warned that the GDP number would be soft, blaming it on the government shutdown that ended in November.
Published Fri, Feb 20 2026 8:31 AM EST Updated Moments Ago
Economic growth cooled near the end of 2025 while inflation held firm, according to data released Friday that could complicate the Federal Reserve's interest rate path. Gross domestic produce rose at an annualized rate of just 1.4%, according to Commerce Department numbers adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for a 2.5% gain.
At the same time, inflation held firm in December, according to the gauge most closely watched by Fed officials.
The core personal consumption expenditures price index, which excludes food and energy, rose 3% in December, according to a separate release. That matched the consensus forecast but kept the pivotal inflation measure well above the Fed's 2% target.
On a headline basis, the PCE index accelerated 2.9%, or 0.1 percentage point higher than expected. Both indexes rose 0.4% for the month, compared to the respective forecasts for 0.3%.
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Original article -
The core personal consumption expenditures price index was expected to increase 3% from a year ago in December, according to the Dow Jones consensus. Gross domestic product was projected to rise at a 2.5% annualized pace in the fourth quarter.
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