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US Economy Experiences Significant Slowdown with 1.4% Growth in Q4 2025

KVIA•Friday, February 20, 2026 at 1:33 PM•CNN Newsource

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The US economy's growth rate sharply declined to 1.4% in the fourth quarter of 2025, marking the slowest expansion since the pandemic. This slowdown is attributed to a historic government shutdown, reduced consumer spending, and cuts in federal expenditure. Despite these challenges, the overall growth for the year reached 2.2%, aided by spending from affluent consumers. Consumer spending, which is vital for economic health, slowed to its weakest pace since early 2025, while inflation rose to 2.9%, the highest in nearly two years. Economists anticipate a recovery in the current quarter as the economy adjusts to these pressures.

Key Details: • Fourth-quarter GDP growth rate: 1.4%, down from 4.4% in Q3 2025. • Overall GDP growth for 2025: 2.2%, the slowest since 2020. • Consumer spending growth rate in December: 0.4%, adjusted for inflation: 0.1%. • Personal income growth in December: 0.3%, but flat when accounting for inflation. • Inflation rate as of December: 2.9%, highest since March 2024.

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