GDP report: US financial system grows at 1.4% price in fourth quarter, a dramatic slowdown | EUROtoday

America’s gross home product — the nation’s output of products and companies — elevated at an 1.4% annual price within the fourth quarter, down from 4.4% within the July-September quarter and three.8% within the quarter earlier than that.

A downturn in authorities and client spending contributed to the slowdown in fourth-quarter progress, the Commerce Department reported Friday. Consumer spending rose simply 2.2%, a big slowdown from the third quarter’s wholesome 3.5% achieve.

The report underscores an odd facet of the U.S. financial system: It is rising steadily, however with out creating many roles. Growth was a reasonably wholesome 2.2% in 2025, but a authorities report final week confirmed that employers added lower than 200,000 jobs final 12 months — the fewest since COVID struck in 2020.

Economists level to a number of potential causes for the hole: The Trump administration’s crackdown on immigration has sharply slowed inhabitants progress, decreasing the variety of individuals out there to take jobs. It’s one motive that the unemployment price rose solely barely — to 4.3% from 4% — final 12 months, even with the almost non-existent hiring.

Some companies can also be holding again on including jobs out of uncertainty about whether or not synthetic intelligence will allow them to supply extra with out discovering new workers. And the price of tariffs has diminished many firms’ earnings, presumably main them to chop again on hiring.

Trump, in the meantime, blamed the federal government shutdown.

“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!” he wrote after the report was launched.

“Also, LOWER INTEREST RATES. “Two Late” Powell is the WORST!!! President DJT”

The financial system can also be uncommon proper now as a result of progress is strong, inflation has slowed a bit, and unemployment is low, however surveys present that Americans are typically gloomy in regards to the financial system.

In January, a measure of client confidence fell to its lowest degree since 2014, but customers have stored spending, propelling progress.

Some of that spending could also be disproportionately pushed by upper-income customers, in a phenomenon often called the “K-shaped” financial system. Yet information from many massive banks suggests lower-income customers are nonetheless elevating their spending, even when by not as a lot.