The US economy grew by 1.4 percent in the last quarter of 2025, significantly below earlier projections of 2.5 percent made by economists surveyed by The Wall Street Journal. This slowdown in growth came on the heels of the longest government shutdown in US history, which lasted for 43 days, and had an adverse impact on economic activity during that period. Economically, this was a stark contrast to the third quarter, where the economy showed robust growth at an annualized rate of 4.4 percent, fueled by strong consumer spending and business investments.

The federal government shutdown played a crucial role in hampering economic progress, as federal government expenditures dropped by 16.6 percent during the fourth quarter, contributing to a decrease in GDP by nearly 1.2 percentage points. This unexpected dip in growth raises concerns about the potential lingering effects of political gridlock on economic stability and progress in the future. While the economy thrived in the third quarter, the sudden downturn highlights the fragility of growth in the face of erratic government policy and shutdowns.

Moreover, this situation underscores the necessity for stable governance and fiscal policy to ensure uninterrupted economic development. As the country looks forward to the new year, the focus will likely shift towards how lawmakers can prevent similar occurrences and stimulate sustainable growth moving ahead. The implications of such government-induced slowdowns could reverberate throughout various economic sectors, affecting employment, consumer confidence, and investment strategies.