February 20, 2026 09:39 AM EST<\/p>\n
So, What’s Next For GDP?<\/p>\n
FROM 3 hr 22 min ago<\/p>\n
Today’s report doesn’t signal concern for the future of economic growth, economists and analysts said.\n<\/p>\n
Because a large portion of the drag on GDP was related to the government shutdown, the rapid deceleration in economic growth is not expected to be sustained.\n<\/p>\n
In 2026, the economy could get a boost from tax refunds that will allow consumers to spend a little more early in the year, economists said. BMO Capital Markets estimates that GDP growth at year-end will be 2.5%.\n<\/p>\n
Some factors that could change outlooks include economic risks around tariffs, immigration, and other policies, as well as an uncertain trajectory for the AI boom.\n<\/p>\n
February 20, 2026 09:26 AM EST<\/p>\n
Here’s What Economists Are Saying About Friday’s GDP Report<\/p>\n
FROM 3 hr 35 min ago<\/p>\n
Scott Hoyt, senior director at Moody\u2019s Analytics<\/p>\n
“GDP continues to highlight the economy\u2019s strength. It has posted healthy to strong growth over the last three quarters of last year, and year-over-year growth is at least equal to potential growth, if not a bit above. Nonetheless, the economy\u2019s growth is fragile, as evidenced by the job market.”<\/p>\n
Michael Pearce, chief U.S. economist at Oxford Economics<\/p>\n
“The prolonged federal government shutdown and the expiry of the electric vehicle tax credit weighed on Q4 GDP growth, but the core of the economy is resilient. With tariff pressures fading and tax cuts beginning to fuel an increase in capital spending, the economy will gather momentum in 2026.”<\/p>\n
Sal Guatieri, senior economist at BMO Capital Markets<\/p>\n
“The U.S. economy isn’t as weak as the Q4 headline figure suggests, nor was it as strong as Q3’s 4.4% print suggested.”<\/p>\n
Richard de Chazal, macro analyst at William Blair<\/p>\n
“The negative impact from the government shutdown was very clear in this report, and we should expect to see a rebound in the first quarter due to a recovery here. …From the Fed\u2019s perspective, it will likely look through the noise from the shutdown, and see few signs of economic deterioration that would necessitate further rate cuts for the time being.”<\/p>\n
Kathy Bostjancic, chief economist at Nationwide<\/p>\n
“We maintain our view that economic growth will be solid and less volatile in 2026 as peak policy uncertainty is behind us. Supportive fiscal and monetary policy should help broaden out private sector hiring, and productivity growth should maintain a buoyant pace.”<\/p>\n
February 20, 2026 09:07 AM EST<\/p>\n
2025’s Growth Was Also Slower<\/p>\n
FROM 3 hr 54 min ago<\/p>\n
While the headline fourth-quarter numbers were lower than expected, the full year’s economic growth also showed a slowdown.\n<\/p>\n
GDP grew at a 2.2% pace in 2025, down from 2.8% the year prior.\n<\/p>\n
February 20, 2026 08:50 AM EST<\/p>\n
Stock Futures Slip Amid Friday’s Data Reports<\/p>\n
FROM 4 hr 11 min ago<\/p>\n
Futures contracts connected to the Dow Jones Industrial Average were down 0.1% in recent trading, as were S&P 500 and Nasdaq 100 futures.\n<\/p>\n
The 10-year Treasury yield, which influences interest rates on a variety of consumer loans, including mortgages, rose slightly to 4.07%.\n<\/p>\n
The GDP measure falling short of expectations likely played a role in the drop, but it wasn’t the only data release on Friday that shook investors.\n<\/p>\n
The Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, rose 2.9% year-over-year in December, a faster rate than economists had expected. Core inflation, which excludes volatile food and energy prices, was in line with expectations, rising to 3% from 2.8% in November.\n<\/p>\n
Follow along with market reactions throughout the day in our live markets coverage<\/a>.\n<\/p>\n –Colin Laidley<\/a><\/p>\n February 20, 2026 08:44 AM EST<\/p>\n Why Did GDP Slow Down So Much?<\/p>\n FROM 4 hr 17 min ago<\/p>\n According to Friday’s report by the Bureau of Economic Analysis, GDP was significantly slower in the last three months of 2025 than it was in the prior quarter.\n<\/p>\n The BEA found that the deceleration largely “reflected downturns in government spending and exports.” Economists said much of this is attributed to the government shutdown in October and November.\n<\/p>\n Consumer spending, a main engine of the economy, also slowed but was still strong. Consumer spending “added 1.6 percentage points to growth, compared to 2.3 percentage points in the prior quarter,” wrote Moody’s Analytics’ Scott Hoyt.\n<\/p>\n The BEA found that the slowdown in consumer spending was “partly offset by an acceleration in investment” as companies raced to build out AI infrastructure.\n<\/p>\n February 20, 2026 08:32 AM EST<\/p>\n Economic Growth Was Far Slower Than Expected in the Fourth Quarter<\/p>\n FROM 4 hr 29 min ago<\/p>\n Inflation-adjusted gross domestic product grew at an annualized rate of 1.4% in the fourth quarter, down from 4.4% in the third quarter. It was also well below economists’ expectations of a 2.4% increase.\n<\/p>\n Friday’s figures are an advance estimate that the bureau will revise twice as new data comes in. Final numbers will be released in April.\n<\/p>\n February 20, 2026 08:25 AM EST<\/p>\n Did the Longest-Ever Government Shutdown Affect GDP?<\/p>\n FROM 4 hr 36 min ago<\/p>\n On Friday morning, President Donald Trump took to social media to blame slower GDP growth on his political opponents.\n<\/p>\n “The Democrat Shutdown cost the U.S.A. at least two points in GDP,” he wrote.\n<\/p>\n Economists say the historically long 43-day shutdown<\/a> in October and November hindered economic growth. \u00a0Deutsche Bank researchers estimate that had the shutdown not happened, the economy would have grown 70 basis points<\/a> more in the fourth quarter.\n<\/p>\n They also say the shutdown wasn’t the only occurrence holding the economy back.\n<\/p>\n “[The forecasted growth level] is no small feat for an economy that had to weather a massive trade policy uncertainty shock and the longest shutdown in history last year,” wrote Aditya Bhave, U.S. economist for Bank of America Securities.\n<\/p>\n February 20, 2026 07:57 AM EST<\/p>\n Economic Growth and Personal Finances Seem Misaligned<\/p>\n FROM 5 hr 4 min ago<\/p>\n The economy may be growing at a solid pace, but it doesn\u2019t feel like it to many Americans.\u00a0\n<\/p>\n Economists are generally optimistic about the economy, but the public hasn’t hated it this much in more than a decade. Consumer sentiment fell to its lowest level since 2014 in January, according to a survey by The Conference Board\n<\/p>\n People with high incomes account for most consumer spending that is fueling the economy, while lower- and middle-income households struggle to make ends meet<\/a>. Not only that, but the job boom that usually accompanies this level of economic growth is ostensibly missing<\/a>.\n<\/p>\n February 20, 2026 07:43 AM EST<\/p>\n Trump Has Predicted Booming Economic Growth<\/p>\n FROM 5 hr 18 min ago<\/p>\n President Donald Trump wants the economy to achieve something rarely seen outside wartime: a 15% growth rate.\n<\/p>\n “We should be at 15%,” Trump said in an interview with FOX Business aired earlier this month. “We can grow at 15%. I think more than that.”\n<\/p>\n The president did not specify his exact growth metric or the timeframe. However, economic growth is usually expressed as the inflation-adjusted annual rate of growth of the Gross Domestic Product. If that is the goalpost, meeting it would take a miracle, or if history is a guide, a disaster.\n<\/p>\n Real GDP usually grows at 2%-3% per year.2 GDP growth has hit double digits only in extreme circumstances, typically when the country is bouncing back from a catastrophe.\n<\/p>\n Read more about Trump\u2019s economic growth prediction here<\/a>.\n<\/p>\n –Diccon Hyatt<\/a>\n<\/p>\n February 20, 2026 07:32 AM EST<\/p>\n What Happened in the Third Quarter GDP Report?<\/p>\n FROM 5 hr 29 min ago<\/p>\n The U.S. economy grew much faster than forecasters had expected in the third quarter, thanks to a drop in imports and a surge in consumer spending.\n<\/p>\n The inflation-adjusted Gross Domestic Product grew at an annual rate of 4.4% in the third quarter, up from 3.8% in the second quarter.\n<\/p>\n That blew past the 3.2% growth forecasters had expected, and was well above the 2.6% average annual growth rate over the previous four years.\n<\/p>\n –Diccon Hyatt<\/a>\n<\/p>\n February 20, 2026 07:16 AM EST<\/p>\n What Do Economists Expect From Today\u2019s Report?\u00a0<\/p>\n FROM 5 hr 45 min ago<\/p>\n The economy is likely growing at a healthy clip, avoiding both a tariff-driven slump and an AI-fueled boom.\n<\/p>\n The Bureau of Economic Analysis is expected to report Friday that the inflation-adjusted gross domestic product grew at an annualized rate of 2.5% in the fourth quarter, down from 4.4% in the third quarter, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.\n<\/p>\n A report in line with expectations would show that the economy continued to expand thanks to the massive investments in data centers that are fueling the AI arms race. The AI bump could help offset the effects of the record-long government shutdown, but it likely won’t be large enough to signal a major economic boost.\n<\/p>\n \u201cRecent data reinforce our view that real GDP growth remains on a solidly positive trajectory, largely reflecting sturdy consumer spending and a strengthening rate of business investment,\u201d wrote a team of Wells Fargo economists Wednesday.\n<\/p>\n