The U.S. economy expanded by just 0.7% in the fourth quarter of 2025, a significant downgrade from the initial 1.4% projection and well below economist expectations, according to an NBC News report. The sluggish growth represents a sharp decline from the third quarter's 4.4% and second quarter's 3.8% growth rates. A 43-day government shutdown accounted for at least 1.16 percentage points of the decline through reduced federal spending. The Trump administration's military operations against Iran further dampened growth prospects, with surging oil prices reaching levels unseen since 2022 and clouding the economic outlook. Compounding concerns, weak job creation data showed the lowest hiring outside recession years since 2002, with the unemployment rate rising to 4.4%. The combination of factors has left economists uncertain about the economy's trajectory in coming months.Watch the video below. Your browser does not support the video tag.