The US economy expanded by 2.2% in 2025, slowing from 2.8% in 2024 and marking the weakest annual growth rate since the 2.1% contraction recorded during the pandemic in 2020. While consumer spending and nonresidential investment remained solid, net exports weighed on growth. The rollout of US tariffs in the first half of the year prompted businesses and households to front-load purchases, driving imports to record highs and widening the trade deficit. Residential investment also declined, and federal government spending contracted amid the longest government shutdown on record. Public-sector employment continued to fall as aggressive downsizing efforts, including buyouts and restructuring initiatives led by the Department of Government Efficiency (DOGE), reduced the federal workforce.