The economy grew at a 1.4% seasonally adjusted annual rate in the fourth quarter of 2025, the Bureau of Economic Analysis reported in an estimate of gross domestic product, far below the forecast growth that President Donald Trump and Republicans were hoping would boost their political prospects as they prepare for the midterm elections.
The consensus among economists was that GDP would increase at a 3% rate in the fourth quarter after growing at a strong 4.4% pace in the third quarter.
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Trump has struggled with poor economic approval ratings. He entered office promising to lower prices after years of too-high inflation under former President Joe Biden, but price growth of many goods and services has remained stubbornly high.
Despite the anemic fourth quarter numbers, overall GDP growth for 2025 came out to be 2.2%, according to the preliminary estimate.
The Trump administration is looking to tout any positive economic news that it can get, and GDP growth for the past year has been a bright spot for the administration, so the administration will likely focus on the total 2025 numbers, instead of the latest reading for the fourth quarter.
Some of the slowdown in the final quarter of 2025 is attributable to last year’s government shutdown, the longest in history, which reflected a marked decrease in federal government spending.
Also reflecting the lower quarterly reading, the agency subtracted some exports from the fourth quarter because they represented silver bars being purchased for investment purposes.
Still, the positive economic growth this year cuts against the predictions of many economists that the president’s aggressive tariff agenda would curb growth. Trump’s tariffs have drawn a torrent of criticism from Democrats and some Republicans.
Republicans have been united, though, behind the tax cuts included in the One Big Beautiful Bill Act. The White House has maintained that the provisions in the bill that allow businesses to quickly write off investments will lead to a boom in capital expenditures and thus economic growth.
The GOP is also squarely behind the Trump administration’s efforts to roll back regulations that conservatives blame for hamstringing the private sector, especially environmental rules.
GDP growth will be closely watched in 2026 as the midterm elections approach. Strong GDP growth is starkly at odds with the idea that the economy is in or nearing a recession.
Another positive economic development for the White House has been the resilience of the labor market. While it has slowed over the past year, job growth has still remained positive, and claims for unemployment insurance benefits have remained low.
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The economy added 130,000 jobs in January, according to the Bureau of Labor Statistics, faster than the rate needed to keep pace with population growth. The unemployment rate ticked down a tenth of a percentage point to 4.3%, a low rate by historical standards.
Still, a revision to the past year’s data showed that payroll employment was 1 million lower at the end of 2025 than previously thought. Average monthly payroll growth for 2025 was revised down from roughly 50,000 to 15,000.