The latest GDP data isn't as bad as it looks. Here's what to know.

February 21, 2026

TL;DR

Fourth-quarter 2025 GDP growth was 1.4%, significantly lower than the previous quarter's 4.4% and below economists' forecasts.
A 43-day government shutdown from October to early November 2025 reduced GDP growth by approximately 1 percentage point.
Consumer spending slowed to a 2.4% increase in Q4 2025 from 2.9% in Q3 2025.
Despite the Q4 slowdown, analysts predict an economic rebound in early 2026, citing strong job growth, cooling inflation, and potential benefits from tax cuts and refunds.
The Personal Consumption Expenditures (PCE) report indicated inflation remained sticky, growing at a 2.9% annual rate in December.

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