U.S. economy grows at 1.4% rate in the fourth quarter, slower than expected
BNN Bloomberg
U.S. economic growth slowed in the final three months of last year, dragged down by the six-week shutdown of the federal government and a pullback in consumer spending.
The nation’s gross domestic product — the output of goods and services — increased at a 1.4 per cent annual rate in the fourth quarter, the Commerce Department reported Friday, down from 4.4 per cent in the July-September quarter and 3.8 per cent in the quarter before that.
Consumer spending rose just 2.4 per cent, a significant slowdown from the third quarter’s healthy 3.5 per cent gain.
The report also underscores an odd aspect of the U.S. economy: It is growing steadily, but without creating many jobs. Growth was a fairly healthy 2.2 per cent in 2025, yet a government report last week showed that employers added less than 200,000 jobs last year — the fewest since COVID struck in 2020.
Economists point to several possible reasons for the gap: The Trump administration’s crackdown on immigration has sharply slowed population growth, reducing the number of people available to take jobs. It’s one reason that the unemployment rate rose only slightly — to 4.3 per cent from 4 per cent — last year, even with the nearly non-existent hiring.
Some businesses may also be holding back on adding jobs out of uncertainty about whether artificial intelligence will enable them to produce more without finding new employees. And the cost of tariffs has reduced many companies’ profits, possibly leading them to cut back on hiring.
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