The US economy is starting to show symptoms of strain, according to the IMF, with fourth quarter growth probably falling short of its previous 1.9% prediction.
Because of the protracted government shutdown, economic data flow has been hampered, making it more difficult for the IMF to adequately analyze present conditions.
The IMF had to postpone its yearly Article IV talks with U.S. officials because the 43 day partial shutdown prevented crucial data and coordination. A new timetable for the review has not yet been established, and preparatory work could not be finished.
According to IMF spokesman Julie Kozack, employment growth has further slowed and domestic demand has been decreasing. Economic activity is under pressure from declining immigration inflows, increasing tariffs, and more general policy uncertainty.
The extended government shutdown is expected to have a negative impact on U.S. growth in the fourth quarter, according to the IMF. In line with previous post shutdown recoveries, it too predicts a recovery in the first quarter of 2026.
Tariffs have increased upside risks, even if inflation is still predicted to reach the Federal Reserve's 2% target. Although the IMF thinks recent rate decreases were fair and advises caution moving forward, slowing job growth complicates the Fed's policy considerations.
In response to the Trump administration's boycott of the next G20 leaders conference, Kozack reiterated the importance of the forum for resolving international issues. Kristalina Georgieva, the managing director of the IMF, will be present following discussions in Angola.
During the October meetings, US Treasury Secretary Scott Bessent backed a joint G20 statement on tackling debt concerns. With a leaders' summit scheduled for Miami in 2026, the IMF anticipates that debt issues will remain crucial as the United States gets ready to assume the G20 presidency.
