Elon Musk Brings 4th Quarter GDP Growth to a Crawl

Photograph by Nathaniel St. Clair

The GDP story for the 4th quarter looked much worse than was generally expected. The big factor dragging down growth was a 16.6% drop in federal spending. Part of this drop was due to the government shutdown, but this was likely the less important factor since most government employees continued to work during the shutdown. (The 2018-2019 shutdown is barely visible in the data.)

The larger cause of the shrinkage was the DOGE cuts put in place by Elon Musk earlier in the year.