WASHINGTON – The U.S. economy, hobbled by last fall’s 43-day government shutdown, advanced at a sluggish 0.7% annual rate from October through December, the Commerce Department reported Friday in a big downgrade of its initial estimate.

Growth in gross domestic product — the nation’s output of goods and services — was down sharply from 4.4% in last year’s third quarter and 3.8% in the second. And the fourth-quarter number was half the government’s first estimate of 1.4%; economists had expected the revision to go the other way — and show stronger growth.

kAmu656C2= 8@G6C?>6?E DA6?5:?8 2?5 :?G6DE>6?E[ 4=@336C65 3J E96 D9FE5@H?[ A=F?865 2E 2 `e]fT C2E6[ 924<:?8 `]`e A6C46?E286 A@:?ED @77 7@FCE9\BF2CE6C 8C@HE9]k^Am

kAmu@C 2== @7 a_ad[ vs! 8C6H a]`T[ D@=:5 3FE 5@H? 7C@> 2? :?:E:2= 6DE:>2E6 @7 a]aT 7C@> a_ac 2?5 a_ab]k^Am

kAmx? E96 7@FCE9 BF2CE6C[ 4@?DF>6C DA6?5:?8 8C6H 2E 2 aT 4=:A[ 5@H? 7C@> b]dT 😕 E96 E9:C5 BF2CE6C] qFD:?6DD :?G6DE>6?E[ 6I4=F5:?8 9@FD:?8[ :?4C62D65 2E 2 962=E9J a]aT A246[ =:<6=J C67=64E:?8 >@?6J 36:?8 A@FC65 :?E@ 2CE:7:4:2= :?E6==:86?46[ 3FE :E H2D 5@H? 7C@> b]aT 😕 E96 E9:C5 BF2CE6C]k^Am

kAm%96 &]$] 64@?@>J — E96 H@C=5’D =2C86DE — 92D D9@H? DFCAC:D:?8 C6D:=:6?46 😕 E96 7246 @7 !C6D:56?E s@?2=5 %CF>A’D A@=:4:6D[ :?4=F5:?8 DH66A:?8 :>A@CE E2I6D 2?5 >2DD 56A@CE2E:@?D] qFE E96 H2C H:E9 xC2? 92D 5C:G6? FA @:= 2?5 82D AC:46D 2?5 4=@F565 E96 64@?@>:4 @FE=@@<]k^Am

kAm|62?H9:=6[ E96 p>6C:42? ;@3 >2C<6E 😀 😕 2 D=F>A] {2DE >@?E9[ 4@>A2?:6D[ ?@?AC@7:ED 2?5 8@G6C?>6?E 286?4:6D 4FE ha[___ ;@3D] x? a_ad[ E96J 25565 76H6C E92? `_[___ ;@3D 2 >@?E9[ E96 H62<6DE 9:C:?8 @FED:56 C646DD:@? J62CD D:?46 a__a]k^Am

kAmt4@?@>:DED 2C6 AFKK=:?8 @FE H96E96C 9:C:?8 H:== 2446=6C2E6 E@ 42E49 FA E@ D@=:5 vs! 8C@HE9 @C :7 8C@HE9 H:== D=@H E@ C67=64E 2 H62< =23@C >2C<6E @C :7 25G2?46D 😕 2CE:7:4:2= :?E6==:86?46 2?5 2FE@>2E:@? >62? E92E E96 64@?@>J 42? 82==@A 29625 H:E9@FE 4C62E:?8 >2?J ;@3D]k^Am

kAmuC:52J’D vs! H2D E96 D64@?5 @7 E96 E9C66 6DE:>2E6D @7 7@FCE9\BF2CE6C 8C@HE9] %96 7:?2= C6A@CE 😀 5F6 pAC:= h]k^Am

Copyright 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.