US GDP Hit by Shutdown as AI, Energy Deals Advance

US economic growth cooled markedly at the end of 2025 as a protracted government shutdown and softer demand cut into output. Inflation‑adjusted gross domestic product rose at a 1.4% annualised rate in the fourth quarter, well below the consensus estimate of 2.8% and down from 4.4% in the prior period, according to the Bureau of Economic Analysis.

The BEA estimated the shutdown, which covered almost half of the quarter, subtracted about 1 percentage point from GDP. Paul Ashworth, Chief North America economist at Capital Economics, wrote that “the government shutdown ended up being a much bigger drag on the economy” than earlier data suggested, and said he expected that decline to be reversed in coming months.

The weak headline figure followed softer consumer spending and trade, while business investment was a relative bright spot. Investment rose 3.7%, with strength in IT equipment, software and R&D. Federal Reserve correspondent Jennifer Schonberger linked that performance to continued outlays on artificial intelligence infrastructure, saying it “is going to continue to boost the economy, continue to boost productivity.”

Alongside GDP, December data for the Fed’s preferred inflation gauge underscored price pressures. Core personal consumption expenditures (PCE) inflation ran at 3% year‑on‑year, a full percentage point above the central bank’s 2% target. Schonberger noted core PCE was in line with expectations flagged by Chair Jerome Powell, but said it highlighted that “inflation’s still looking a bit sticky.”

With the Fed having already cut rates three times at the end of 2025, policymakers are now signalling patience. Schonberger said officials are likely to put more weight on the inflation prints than on the temporary growth hit from the shutdown, adding that the latest data “keeps the Fed on hold at this point.”

Ahead of the official release, President Donald Trump drew attention by commenting on the figures on social media at 7:50 a.m., writing that the “Democrat Shutdown cost the U.S.A. at least two points in GDP.” The data were published at 8:30 a.m. Markets reacted modestly, with the S&P 500 (SPX) slipping 0.25% after the GDP and inflation reports.

While macro data signalled a slowdown, corporate and project news pointed to continued investment in energy and infrastructure. Ampyr Solar Europe announced the acquisition of the East Yorkshire Solar Farm project in the UK from BOOM Power. With planned capacity above 530MWp and a grid connection adjacent to Drax power station, the project is expected to supply electricity for around 100,000 households.

The project secured a Development Consent Order in May 2025, classifying it as a Nationally Significant Infrastructure Project. Ampyr said the acquisition, its largest photovoltaic and battery energy storage project, supports national decarbonisation goals and will create local jobs and indirect benefits for businesses. BOOM Power plans to remain involved through construction and energisation, targeted for 2029.

In North America, midstream operator Targa Resources reported record 2025 results, with adjusted EBITDA of $4.96 billion, up more than $800 million year‑on‑year, driven by record volumes across its Permian gas gathering and NGL logistics footprint. The company guided to 2026 adjusted EBITDA of $5.4‑$5.6 billion and outlined elevated growth capital of about $4.5 billion, including several new gas processing plants and fractionation projects.

US utility and infrastructure spending plans also expanded. Evergy raised its long‑term adjusted EPS growth target to 6–8% plus through 2030, off a 2026 midpoint guidance of $4.24 per share, and lifted its rolling five‑year capex plan to $21.6 billion. The company cited signed electric service agreements for four major data‑centre projects representing 1.9GW of eventual peak demand as key drivers of an 11.5% expected annual rate‑base growth.

In Canada, PPL Corporation updated its own investment outlook, unveiling a $23 billion capital plan for 2026–2029 and extending its 6–8% annual EPS growth target through at least 2029. The company expects average annual rate‑base growth of roughly 10.3% and raised its quarterly dividend by 4.6% to $0.285 per share.

Public authorities continued to target housing and social infrastructure. In Quebec, federal, provincial and municipal governments announced a mixed housing project in Granby with 101 units for independent seniors at a total cost of $41.5 million. In Montréal, they detailed combined funding exceeding $21 million for two projects providing 138 affordable units for vulnerable individuals, including women and people experiencing or at risk of homelessness.