United States: Economy#
The US has the most technologically powerful economy in the world, with a per capita GDP of $54,800. US firms are at or near the forefront in technological advances, especially in computers, pharmaceuticals, and medical, aerospace, and military equipment; however, their advantage has narrowed since the end of World War II. Based on a comparison of GDP measured at Purchasing Power Parity conversion rates, the US economy in 2014, having stood as the largest in the world for more than a century, slipped into second place behind China, which has more than tripled the US growth rate for each year of the past four decades.In the US, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, businesses face higher barriers to enter their rivals' home markets than foreign firms face entering US markets.
Long-term problems for the US include stagnation of wages for lower-income families, inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, energy shortages, and sizable current account and budget deficits.
The onrush of technology has been a driving factor in the gradual development of a "two-tier" labor market in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. But the globalization of trade, and especially the rise of low-wage producers such as China, has put additional downward pressure on wages and upward pressure on the return to capital. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income.
Imported oil accounts for nearly 55% of US consumption and oil has a major impact on the overall health of the economy. Crude oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices climbed another 50% between 2006 and 2008, and bank foreclosures more than doubled in the same period. Besides dampening the housing market, soaring oil prices caused a drop in the value of the dollar and a deterioration in the US merchandise trade deficit, which peaked at $840 billion in 2008. Because the US economy is energy-intensive, falling oil prices since 2013 have alleviated many of the problems the earlier increases had created.
The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn pushed the US into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, the US Congress established a $700 billion Troubled Asset Relief Program (TARP) in October 2008. The government used some of these funds to purchase equity in US banks and industrial corporations, much of which had been returned to the government by early 2011. In January 2009, Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. In 2010 and 2011, the federal budget deficit reached nearly 9% of GDP. In 2012, the Federal Government reduced the growth of spending and the deficit shrank to 7.6% of GDP. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries.
Wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the budget deficit and public debt. Through 2014, the direct costs of the wars totaled more than $1.5 trillion, according to US Government figures.
In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform that was designed to extend coverage to an additional 32 million Americans by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on healthcare - public plus private - rose from 9.0% of GDP in 1980 to 17.9% in 2010.
In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight.
In December 2012, the Federal Reserve Board (Fed) announced plans to purchase $85 billion per month of mortgage-backed and Treasury securities in an effort to hold down long-term interest rates, and to keep short term rates near zero until unemployment dropped below 6.5% or inflation rose above 2.5%. In late 2013, the Fed announced that it would begin scaling back long-term bond purchases to $75 billion per month in January 2014 and further reduce them as conditions warranted; the Fed ended the purchases during the summer of 2014. In 2014, the unemployment rate dropped to 6.2%, and continued to fall to 5.5% by mid-2015, the lowest rate of joblessness since before the global recession began; inflation stood at 1.7%, and public debt as a share of GDP continued to decline, following several years of increases. In December 2015, the Fed raised its target for the benchmark federal funds rate by 0.25%, the first increase since the recession began, but the Fed has opted to hold the target rate steady at 0.25%-0.5% through the first three quarters of 2016, with US GDP growth falling below 2% in each of those quarters.
Economic Facts#
| GDP (purchasing power parity) | $18.56 trillion (2016 est.) $18.27 trillion (2015 est.) $17.81 trillion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $18.56 trillion (2015 est.) |
| GDP - real growth rate | 1.6% (2016 est.) 2.6% (2015 est.) 2.4% (2014 est.) |
| GDP - per capita (PPP) | $57,300 (2016 est.) $56,800 (2015 est.) $55,800 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 17.6% of GDP (2016 est.) 19.1% of GDP (2015 est.) 19.2% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 68.6% government consumption: 17.7% investment in fixed capital: 15.9% investment in inventories: 0.5% exports of goods and services: 12% imports of goods and services: -14.7% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 1.1% industry: 19.4% services: 79.5% ++ (2016 est.) |
| Agriculture - products | wheat, corn, other grains, fruits, vegetables, cotton; beef, pork, poultry, dairy products; fish; forest products |
| Industries | highly diversified, world leading, high-technology innovator, second-largest industrial output in the world; petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining |
| Industrial production growth rate | 2.1% (2016 est.) |
| Labor force | 158.6 million note: includes unemployed (2016 est.) |
| Labor force - by occupation | farming, forestry, and fishing: 0.7% manufacturing, extraction, transportation, and crafts: 20.3% managerial, professional, and technical: 37.3% sales and office: 24.2% other services: 17.6% note: figures exclude the unemployed ++ (2009) |
| Unemployment rate | 4.7% (2016 est.) 5.3% (2015 est.) |
| Population below poverty line | 15.1% (2010 est.) |
| Household income or consumption by percentage share | lowest 10%: 2% highest 10%: 30% (2007 est.) |
| Distribution of family income - Gini index | 45 (2007) 40.8 (1997) |
| Budget | revenues: $3.363 trillion expenditures: $3.893 trillion note: for the US, revenues exclude social contributions of approximately $1.0 trillion; expenditures exclude social benefits of approximately $2.3 trillion (2016 est.) |
| Taxes and other revenues | 18.1% of GDP note: excludes contributions for social security and other programs; if social contributions were added, taxes and other revenues would amount to approximately 22% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -2.9% of GDP (2016 est.) |
| Public debt | 73.8% of GDP (2016 est.) 73.6% of GDP (2015 est.) note: data cover only what the United States Treasury denotes as "Debt Held by the Public," which includes all debt instruments issued by the Treasury that are owned by non-US Government entities; the data include Treasury debt held by foreign entities; the dat |
| Fiscal year | 1 October - 30 September |
| Inflation rate (consumer prices) | 1.3% (2016 est.) 0.1% (2015 est.) |
| Central bank discount rate | 0.5% (31 December 2010) 0.5% (31 December 2009) |
| Commercial bank prime lending rate | 3.5% (31 December 2016 est.) 3.26% (31 December 2015 est.) |
| Stock of narrow money | $3.311 trillion (31 December 2016 est.) $3.022 trillion (31 December 2015 est.) |
| Stock of broad money | $13.17 trillion (31 December 2016 est.) $12.02 trillion (31 December 2015 est.) |
| Stock of domestic credit | $20.31 trillion (31 December 2016 est.) $19.23 trillion (31 December 2015 est.) |
| Market value of publicly traded shares | $25.07 trillion (31 December 2015 est.) $26.33 trillion (31 December 2014 est.) $24.03 trillion (31 December 2013 est.) |
| Current account balance | -$469.4 billion (2016 est.) -$463 billion (2015 est.) |
| Exports | $1.471 trillion (2016 est.) $1.51 trillion (2015 est.) |
| Exports - commodities | agricultural products (soybeans, fruit, corn) 9.2%, industrial supplies (organic chemicals) 26.8%, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49.0%, consumer goods (automobiles, medicines) 15.0% (2008 est.) |
| Exports - partners | Canada 18.6%, Mexico 15.7%, China 7.7%, Japan 4.2% (2015) |
| Imports | $2.205 trillion (2016 est.) $2.273 trillion (2015 est.) |
| Imports - commodities | agricultural products 4.9%, industrial supplies 32.9% (crude oil 8.2%), capital goods 30.4% (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery), consumer goods 31.8% (automobiles, clothing, medicines, (2008 est.) |
| Imports - partners | China 21.5%, Canada 13.2%, Mexico 13.2%, Japan 5.9%, Germany 5.5% (2015) |
| Reserves of foreign exchange and gold | $117.6 billion (31 December 2015 est.) $130.1 billion (31 December 2014 est.) |
| Debt - external | $17.91 trillion (31 March 2016 est.) $17.85 trillion (31 March 2015 est.) note: approximately 4/5ths of US external debt is denominated in US dollars; foreign lenders have been willing to hold US dollar denominated debt instruments because they view the dollar as the world's reserve currency |
| Stock of direct foreign investment - at home | $3.648 trillion (31 December 2016 est.) $3.28 trillion (31 December 2015 est.) |
| Stock of direct foreign investment - abroad | $5.566 trillion (31 December 2016 est.) $5.269 trillion (31 December 2015 est.) |
| Exchange rates | British pounds per US dollar: 0.7391 (2016 est.), 0.6542 (2015 est.), 0.607 (2014 est), 0.6391 (2013 est.), 0.6324 (2012 est.) Canadian dollars per US dollar: 1.331 (2016 est.), 1.2788 (2015 est.), 1.1047 (2014 est.), 1.0298 (2013 est.), 0.9992 (2012 est.) Chinese yuan per US dollar: 6.626 (2016 est.) 6.2275 (2015 est.), 6.1434 (2014 est.), 6.1958 (2013 est.), 6.3123 (2012 est.) euros per US dollar: 0.9214 (2016 est.), 0.885 (2015 est.), 0.7525 (2014 est.), 0.7634 (2013 est.), 0.7752 (2012 est.) Japanese yen per US dollar: 107.1 (2016 est.), 121.02 (2015 est.), 105.86 (2014 est.), 97.44 (2013 est.), 79.79 (2012 est.) |