By CHRISTOPHER RUGABER and MATT OTT, AP Economics Writers

WASHINGTON (AP) — U.S. economic growth slowed in the final three months of last year, dragged down by the six-week shutdown of the federal government and a pullback in consumer spending.

The nation’s gross domestic product — the output of goods and services — increased at a 1.4% annual rate in the fourth quarter, the Commerce Department reported Friday, down from 4.4% in the July-September quarter and 3.8% in the quarter before that.

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Consumer spending rose just 2.4%, a significant slowdown from the third quarter’s healthy 3.5% gain.

The report also underscores an odd aspect of the U.S. economy: It is growing steadily, but without creating many jobs. Growth was a fairly healthy 2.2% in 2025, yet a government report last week showed that employers added less than 200,000 jobs last year — the fewest since COVID struck in 2020.

Economists point to several possible reasons for the gap: The Trump administration’s crackdown on immigration has sharply slowed population growth, reducing the number of people available to take jobs. It’s one reason that the unemployment rate rose only slightly — to 4.3% from 4% — last year, even with the nearly non-existent hiring.

Some businesses may also be holding back on adding jobs out of uncertainty about whether artificial intelligence will enable them to produce more without finding new employees. And the cost of tariffs has reduced many companies’ profits, possibly leading them to cut back on hiring.

The economy is also unusual right now because growth is solid, inflation has slowed a bit, and unemployment is low, but surveys show that Americans are generally gloomy about the economy. In January, a measure of consumer confidence fell to its lowest level since 2014, yet consumers have kept spending, propelling growth.

Some of that spending may be disproportionately driven by upper-income consumers, in a phenomenon known as the “K-shaped” economy. Yet data from many large banks suggests lower-income consumers are still raising their spending, even if by not as much.

By CHRISTOPHER RUGABER, AP Economics Writer

WASHINGTON (AP) — A key inflation gauge accelerated in December to the fastest pace in nearly a year, showing how prices are still rising more quickly than most Americans would prefer — and faster than the Federal Reserve’s target of 2% a year.

Prices rose 0.4% in December from the previous month, up from 0.2% in November, the Commerce Department said Friday in a report that was delayed by the six-week government shutdown last fall. The monthly increase was the highest since last February. Compared with a year ago, inflation rose 2.9% in December, up from 2.8% in November. That is the largest yearly increase since March 2024.

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Core prices — which exclude the volatile food and energy categories — also rose 0.4% in December from the previous month, up from 0.2% in November. That is also the highest since last February. Core prices jumped 3% in December from a year ago, faster than November’s 2.8% increase.

The figures show that inflation remains elevated, though it’s down from a peak of near 7% in 2022. With many prices still rising more quickly than they did before the pandemic, the report points to a key reason that many Americans remain unhappy with the economy, even as unemployment remains low and growth is solid.

The report covers what is known as the personal consumption expenditures (PCE) price index, which the Federal Reserve prefers over the better-known consumer price index. The CPI cooled noticeably in January, the government said last week.

But the reason the PCE index is running higher than the consumer price index is because it puts much less weight on some areas where price growth has sharply cooled, such as apartment rents and car prices.

Friday’s report also showed that consumers kept spending at a solid clip in December, when spending rose 0.4% from the previous month, the same as in November.

In December, prices climbed for furniture, clothing, and groceries. Gas prices fell, but the cost of electricity rose and natural gas costs soared 3.7% just in December from the previous month.

The Fed’s interest-rate setting committee met in late January and agreed to keep its short-term rate unchanged at about 3.6% despite repeated demands from President Donald Trump to reduce it. According to minutes from the meeting released Wednesday, most officials want to see inflation fall closer to the Fed’s target before supporting further rate cuts.

MEXICO CITY (AP) — The navies of El Salvador and Mexico announced drug seizures in the Pacific Ocean this week of more than 10 tonnes of cocaine, in contrast to deadly strikes by the U.S. government that just this week left 11 people dead on three boats suspected of carrying drugs in Latin American waters.

The latest announcement came Thursday, when Mexico said it had seized nearly four tonnes of suspected drugs and detained three people from a semisubmersible craft, 250 nautical miles  south of the port of Manzanillo.

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Mexican Security Secretary Omar García Harfuch said via X that the seizure from the sleek, low-riding boat with three visible motors brought the weekly total to nearly 10 tonnes, but he did not provide detail on the other seizures.

Mexican authorities said the seizure was made with intelligence shared U.S. Northern Command and the U.S. Joint Interagency Task Force South.

On Sunday, El Salvador’s navy announced the largest drug seizure in the country’s history of 6.6 tonnes of cocaine. The navy had intercepted a 180-foot boat registered to Tanzania, 380 miles (611 kilometers) southwest of the coast. Navy divers found 330 packages of cocaine hidden in the boat’s ballast tanks. Ten men were arrested from Colombia, Nicaragua, Panama and Ecuador.

On Thursday, Salvadoran authorities gave access to the seized ship FMS Eagle, which had just arrived in the port of La Union. More than 200 wrapped bundles were lined up on the deck.

The Trump administration has pressured Mexico to make more drug seizures over the past year. The trafficking of drugs like fentanyl was the president’s justification for tariffs on Mexican imports.

Mexican President Claudia Sheinbaum has responded with a more aggressive stance toward drug cartels than her predecessor, that has included sending dozens of drug trafficking prisoners to the United States for prosecution.

Sheinbaum has also expressed her disagreement with strikes by the U.S. military in the Caribbean Sea and Pacific Ocean against boats suspected of carrying drugs.

At least 145 people have been killed in those strikes since the U.S. government began targeting those it calls “narcoterrorists” last September.

The U.S. strikes this week included two vessels carrying four people each in the eastern Pacific Ocean and another boat in the Caribbean carrying three people. The administration provided images of the boats being destroyed, but not evidence they were carrying drugs.

By ISABELLA O’MALLEY and AMELIA THOMSON-DEVEAUX

WASHINGTON (AP) — Millions in North America kicked off 2026 with bitterly cold temperatures, with many saying it’s been years since they’ve experienced such frigid winter weather.

“Pipes that never froze on me for 15 years froze,” said Chris Ferro, 58, from Brooklyn, New York, about the abnormally cold temperatures he experienced in January and February. Ferro owns several residential properties in Albany and said multiple days of below-freezing temperatures prevented him from doing repairs and renovations. He said he was thankful that none of the pipes burst and that this winter had the same bitter cold he remembers from when he was young, which contrasts with the relatively warmer winters he experienced in recent years.

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About 6 in 10 U.S. adults say they’ve been personally affected by severe cold weather or severe winter storms in the past five years, according to a new poll from The Associated Press-NORC Center for Public Affairs Research. That’s an increase from an AP-NORC poll conducted in February 2025, when about half of U.S. adults said they’d been affected by extreme cold.

The finding points to the growing prevalence of experiences with cold weather, or at least people’s perceptions of them, after a massive winter storm brought freezing temperatures to the East Coast and caused widespread power outages in the South.

In a warming world, people’s reactions to cold weather are subjective. Scientific research indicates the first quarter of the 21st century was unusually warm by historical standards — mostly due to human-induced climate change — and abnormally cold winters are happening less frequently in North America. Because this type of extreme cold occurs less frequently, experts say Americans are experiencing it more intensely now than they did in the past and prolonged cold spells are unfamiliar to many people, especially younger Americans.

In the summer of 2024, an AP-NORC poll found that about 7 in 10 U.S. adults had experienced extremely hot weather or extreme heat waves in the prior five years.

Higher electric bills, school and work cancellations, and more

The most recent survey found that just in the past year, Americans’ lives have been upended in multiple ways by cold weather.

About 7 in 10 Americans say that in the past year, their electricity or gas bills have been higher than usual because of winter storms or extreme cold. About 4 in 10 have experienced a work or school cancellation because of winter storms or extreme cold, roughly one-third have experienced a power outage, and about 3 in 10 have had a travel cancellation or delay.

Annie Braswell, 66, from Greenville, North Carolina, said January and February felt like “it hadn’t been that cold in 40 years” and that her utility bill doubled compared to normal. She said it was a dramatic change from the weather she experienced last summer when she endured many days at or above 100°F (38°C). “I just take life one day at a time, and I realize these are things that I can’t change,” Braswell said about how she copes with the extreme temperatures.

Heat waves and extreme cold require more heating and cooling to keep temperatures inside homes and buildings comfortable, which leads to higher utility bills. Electricity prices are rising in the U.S. and an AP-NORC poll from October 2025 found that nearly 4 in 10 U.S. adults say the cost of electricity is a “major source” of stress for them. Bill McKibben, a longtime climate activist, told The Associated Press in a separate interview that he thinks rising electricity prices will have a major political impact.

The effects of cold weather were felt across wide swathes of the country. About 6 in 10 Midwesterners, around half of Southerners, and about 4 in 10 Northeasterners say they’ve experienced work or school cancellation as a result of winter storms or extreme cold, compared to 15% of adults who live in the West.

A person bundles up as she takes a walk during a cold weather day in the snow-covered sand at Lake Michigan in Chicago, Wednesday, Jan. 28, 2026. (AP Photo/Nam Y. Huh)

Linking extreme cold and climate change

Among all of the people who experienced some kind of severe weather event in the past few years – including extreme heat, extreme cold, major droughts or water shortages, hurricanes or severe tropical storms, major flooding, wildfires, tornadoes – about two-thirds believe climate change was a cause.

“I think climate change is a natural thing that happens … to some extent it’s sped up by some things,” such as pollutants released from factories and the shipping industry, said Joseph Bird, 21, a college student in Provo, Utah, who identifies as an independent. “I think it increases the frequency of extreme weather is how I’d see it,” said Bird.

Democrats and independents who experienced any kind of severe weather event are much likelier than Republicans to see climate change as a cause.

There’s a particularly large gap between conservative Republicans – only about 3 in 10 who experienced an extreme weather event think it was related to climate change – compared to liberal Democrats, the vast majority of whom think climate change was involved.

While rising atmospheric temperatures are a result of global warming, scientists say that extreme cold outbreaks across North America are a feature of climate change. The Arctic polar vortex, a swirling area of low pressure and cold air that is typically trapped over the North Pole throughout the year, can stretch down and infiltrate regions further south. Scientific research indicates such polar vortex disruptions are happening more frequently due to rapidly warming temperatures in the Arctic and shrinking Arctic sea ice.

A pedestrian bundles up as she crosses a street during a cold weather day in Evanston, Ill., Thursday, Jan. 22, 2026. (AP Photo/Nam Y. Huh)

Nearly all Americans have experienced some kind of extreme weather recently

Overall, the vast majority of U.S. adults, 80%, have experienced some kind of severe weather event in the past five years, although they are much likelier to report experiencing extremely hot weather or extreme heat waves and extreme cold in the past five years than any other kind of major weather events, including major droughts or water shortages, hurricanes or severe tropical storms, major flooding, wildfires, tornadoes, or other severe weather events or weather disasters.

There are no meaningful partisan differences in Americans’ experiences of extreme weather, but about 8 in 10 Democrats who experienced any of these extreme weather events said they were the result of climate change, compared to only about 4 in 10 Republicans.

O’Malley reported from Philadelphia.

The AP-NORC poll of 1,156 adults was conducted Feb. 5-8 using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for adults overall is plus or minus 3.9 percentage points.

The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.