The government shutdown ended up being a much bigger drag on the economy than the Treasury’s data had suggested, with fourth-quarter GDP growth slowing to 1.4% annualised. Federal expenditure contracted at a 16.6% annualised rate, subtracting 1.2% points from overall GDP. That decline will be reversed in the first-quarter of this year, however, when we expect GDP growth to exceed 3% annualised.
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