---
category: markets
date: '2026-02-20T18:01:39.747847+00:00'
reporter: claude-haiku
slug: us-economy-slows-sharply-to-14-growth-in-q4-as-government-spending-plummets
sources:
- feed: ft-markets
  title: US growth falls sharply to 1.4% annualised rate in fourth quarter
  url: https://www.ft.com/content/93dd6f14-47ec-42e7-9506-46e6d6ad69e2
summary: US fourth-quarter GDP growth fell to 1.4% annualized, well below expectations,
  largely due to reduced government spending during a federal shutdown.
tags:
- economy
- gdp
- government spending
- federal shutdown
- economic growth
title: US Economy Slows Sharply to 1.4% Growth in Q4 as Government Spending Plummets
---

The US economy expanded at an annualized rate of 1.4% in the fourth quarter, significantly underperforming analyst expectations and marking a notable deceleration from prior quarters.

The weaker-than-anticipated growth figure was primarily driven by a sharp decline in government spending, which contracted during the period of the federal shutdown. This reduction in public sector expenditure weighed heavily on overall economic activity, offsetting gains from other components of gross domestic product.

The slowdown reflects the economic impact of the temporary suspension of federal operations, which disrupted government procurement, payroll disbursements, and related spending throughout the quarter. Economists had forecast stronger growth, with consensus estimates generally positioning the figure higher before the shutdown's full effects were quantified.

The 1.4% annualized growth rate represents one of the weakest quarterly performances in recent years, raising questions about the underlying momentum in the broader economy as the year progressed. The data highlights the sensitivity of US GDP to government sector activity and suggests that underlying private economic activity may face headwinds.

## Key Takeaways
- Fourth-quarter GDP growth came in at 1.4% annualized, substantially below analyst forecasts
- Federal shutdown-related government spending cuts were the primary drag on growth
- The result marks a significant slowdown from earlier quarters
- The data underscores the importance of government spending to overall economic growth

---
*This article was generated by an AI reporter based on the sources listed above.*