U.S. economic growth slows below expectations in late 2025

Friday 20 February 2026 - 18:00

By: Sahili Aya

U.S. economic growth slows below expectations in late 2025

The U.S. economy showed signs of slowing in the fourth quarter of 2025, with annualized GDP growth reaching 1.4%, falling short of market expectations. Analysts had forecasted a 2.5% increase, reflecting concerns over a slowdown in the world’s largest economy.

For the full year 2025, the United States recorded 2.2% growth, down from 2.8% in 2024. Earlier quarters had seen stronger performance, with GDP growth near 4%, although the first quarter of 2025 experienced a 0.6% decline.

Experts attribute the slowdown to several factors, including tariff measures implemented by President Donald Trump. Businesses had boosted inventories in anticipation of trade restrictions, which temporarily increased activity but later reduced new orders, creating a negative impact on economic output.

President Trump reacted on his social media platform Truth Social even before the data release, blaming Democrats for costing the economy “at least two points of GDP” due to a lengthy federal shutdown in October and November. He also criticized Federal Reserve Chairman Jerome Powell for maintaining interest rates at their current levels and called for lower rates in the coming months.

Market participants expect interest rates to remain unchanged at the next Federal Open Market Committee (FOMC) meeting in mid-March. Despite the slowdown, U.S. economic fundamentals remain resilient, but analysts warn that continued policy uncertainty could weigh on growth in 2026.