US economy grows at 1.4% rate in the fourth quarter, slower than economists expected

Associated Press (AP)EN 2 min read 100% complete by By CHRISTOPHER RUGABER and MATT OTTFebruary 20, 2026 at 02:53 PM

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medium article 2 min

In the fourth quarter of 2025, the U.S. economy grew at a 1.4% annual rate, according to the Commerce Department, a slowdown from the previous two quarters. The deceleration was attributed to the six-week government shutdown and reduced consumer spending, which rose only 2.4% compared to 3.5% in the third quarter. Overall growth for 2025 was 2.2%, but job creation was weak, with fewer than 200,000 jobs added, the fewest since 2020. Economists suggest factors like immigration restrictions, AI uncertainty, and tariffs may be contributing to the hiring slowdown. Despite solid growth, low unemployment, and slowing inflation, consumer confidence remains low, although spending continues, possibly driven by higher-income individuals.

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Chicago 30% COVID-19 40% Commerce Department 50% Trump administration 60% United States ×390%

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economic growth 100% consumer spending 80% job creation 70% unemployment rate 60% gross domestic product 60% artificial intelligence 50% k-shaped economy 40% consumer confidence 40% tariffs 40%