To What Extent Did the Government Shutdown Affect the Sluggish US GDP in the Fourth Quarter?

Analysis of 2025 Q4 GDP Figures

After accounting for all postponed layoffs scheduled for October 1, I recalculated the GDP numbers. The Bureau of Economic Analysis (BEA) reported that GDP growth for the fourth quarter of 2025 fell well short of expectations—coming in significantly below the 3.0% forecast by GDPNow and the 2.8% estimate from Bloomberg Econoday.

Breakdown of GDP Contributions by Sector

• Personal Consumption Expenditures (Services): +1.59 percentage points
• Personal Consumption Expenditures (Goods): -0.01 percentage points
• Government Spending: -0.90 percentage points
• Residential Investment: -0.06 percentage points
• Nonresidential Investment: +0.51 percentage points
• Change in Private Inventory (CIPI): +0.21 percentage points
• Exports: -0.01 percentage points
• Imports: +0.18 percentage points

PCE refers to Personal Consumption Expenditures, while CIPI stands for Change in Private Inventory. By definition, imports do not directly influence GDP totals.