U.S. economic growth slowed in the final quarter of 2025, with real gross domestic product (GDP) rising by only 1.4%, according to a delayed report from the Bureau of Economic Analysis released Friday. The slowdown followed a record 43-day federal government shutdown that began on October 1 and ended on November 12.
The fourth-quarter GDP growth rate was significantly lower than the 4.4% recorded in the third quarter during the summer months. The extended shutdown contributed to this decline as hundreds of thousands of federal workers and contractors went unpaid, impacting household spending and business cashflow. Some companies responded by postponing hiring and investment decisions.
“In Q4, increases in consumer spending and investments were partly offset by decreases in government spending and exports. Consumer spending activity reflected an increase in services such as healthcare that offset a decrease in goods. The artificial intelligence boom drove an increase in business investments.”
Annual data showed that real GDP increased by 2.2% for all of 2025, down from a 2.8% rise in 2024, marking the slowest pace since the pandemic year of 2020.
“Real GDP is an inflation-adjusted measure that represents the total value of all final goods and services produced within a country’s borders in a specific year, expressed in constant prices. It removes the effects of price changes (inflation or deflation) to provide a more accurate, ‘real’ measure of economic growth and output over time.”
The release of the fourth-quarter GDP report was postponed from its original January 29 date due to disruptions caused by the government shutdown.
The New Jersey Business and Industry Association (NJBIA), which serves as the largest statewide employer association representing employers across various sectors, offers advocacy, information, and cost-saving benefits to support business prosperity throughout New Jersey according to its official website. NJBIA also advances competitive excellence for its members while facilitating partnerships among businesses, government entities, and academic institutions [source]. Michele Siekerka is president and chief executive officer of NJBIA [source].