US Q4 GDP Grows Smaller-Than-Forecast 1.4% on Shutdown Impact

• Q4 GDP grew at a significantly weaker-than-expected 1.4%, down from 4.4% in Q3.
• Consumption growth slowed to 2.4% and wages & salaries growth dropped to 0.2% in December.
• PCE Core inflation remained at 3.0% in December, above the Fed's target, while PCE Headline also increased.
• The government shutdown is estimated to have cut 1 percentage point from Q4 GDP, with a rebound expected in Q1.
• Futures markets (S&P, Nasdaq) are down following the weaker GDP data.

The US economy's Q4 GDP growth significantly underperformed expectations at 1.4%, a sharp decline from Q3's 4.4%. This weakness was driven by a drop in consumption and slowing wage growth, with the government shutdown also cutting 1 percentage point from GDP. Inflation, as measured by PCE Core, remained elevated at 3%, posing a challenge for potential Fed rate cuts.