The American economy significantly decelerated in the last three months of 2025. According to the latest data from the Department of Commerce, GDP growth was only 1.4% on an annual basis, a result significantly worse than economists' forecasts predicting 2.5%. The main causes of the weakening momentum were a record-long budget paralysis and a clear reduction in consumer spending. President Donald Trump blamed the Democratic Party and the Federal Reserve's interest rate policy for the worse results.

Sharp GDP Deceleration

The American economy grew in the fourth quarter by 1.4%, a result significantly below analysts' forecasts of 2.5%.

Impact of Budget Paralysis

President Donald Trump pointed to the shutdown as the main cause of losses, estimating them at at least 2 percentage points of economic growth.

New Trade Agreements

The USA and Indonesia concluded an agreement lowering tariffs to 19%, which is expected to result in imports of US goods worth $33-38 billion.

Planned Visit to China

The trip of Donald Trump to China was confirmed for the period from March 31 to April 2 to negotiate the terms of a further trade truce.

The American economy ended 2025 with a result that disappointed financial markets and analysts. Gross Domestic Product increased in the fourth quarter by 1.4%, representing a sharp decline compared to 4.4% recorded in the previous period. Over the entire year, the US economy grew by 2.2%, showing a downward trend relative to 2.8% achieved in 2024. These data burden the balance sheet of the first year of Donald Trump's return to the White House, although the administration emphasizes the impact of external and political factors. The main burden on the indicators turned out to be the longest shutdown in history, i.e., the paralysis of government institutions resulting from a lack of budget agreement. The president stated on social media that this impasse cost the economy "at least two percentage points of GDP." In US history, budget paralysis (shutdowns) have occurred many times since the 1970s, but their length and impact on the real economy have grown with the political polarization of Congress. An additional factor hindering growth was weaker consumer spending, as consumers, faced with uncertainty and high interest rates, began to limit purchases of durable goods and electronics. Donald Trump simultaneously called on the Federal Reserve to lower the cost of money, arguing that the current monetary policy is hampering the country's development. Quarterly Change in US GDP in 2025: 2025-Q1: 3.1, 2025-Q2: 2.9, 2025-Q3: 4.4, 2025-Q4: 1.4 Despite current difficulties, experts see chances for a rebound in 2026. Their optimism is based on planned tax cuts and growing investments in the artificial intelligence sector, which are expected to improve labor productivity. On the international stage, the administration recorded a success by finalizing a trade agreement with Indonesia, which provides for a reduction in tariffs on goods from that country to 19% in exchange for the purchase of US energy and agricultural products worth $33 billion. A visit by the US president to China at the turn of March and April was also announced, which could bring a breakthrough in the ongoing trade war between the powers. 1.4% — was the GDP growth rate in Q4 „The shutdown caused by the Democrats cost the US at least two points in GDP. That's why they're doing it again, in mini form. No shutdowns! Also, LOWER INTEREST RATES.” — Donald Trump

Mentioned People

  • Donald Trump — US President who criticized the GDP data and called for lower interest rates.
  • Jerome Powell — Chairman of the Federal Reserve, criticized by the president for interest rate policy.
  • Xi Jinping — President of the People's Republic of China, whom Trump will meet in the spring.
  • Sergio Gor — US envoy negotiating with India the sale of Venezuelan oil.