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United States Economy Profile

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Economy - overview

The US has the most technologically powerful economy in the world, with a per capita GDP of $59,500. 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 more than 50% 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, 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 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 former 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 FY 2018, the direct costs of the wars will have totaled more than $1.9 trillion, according to US Government figures.

In March 2010, former President OBAMA signed into law the Patient Protection and Affordable Care Act (ACA), 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 former 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.

The Federal Reserve Board (Fed) announced plans in December 2012 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%. The Fed ended its purchases during the summer of 2014, after the unemployment rate dropped to 6.2%, inflation stood at 1.7%, and public debt fell below 74% of GDP. In December 2015, the Fed raised its target for the benchmark federal funds rate by 0.25%, the first increase since the recession began. With continued low growth, the Fed opted to raise rates several times since then, and in December 2017, the target rate stood at 1.5%.

In December 2017, Congress passed and President Donald TRUMP signed the Tax Cuts and Jobs Act, which, among its various provisions, reduces the corporate tax rate from 35% to 21%; lowers the individual tax rate for those with the highest incomes from 39.6% to 37%, and by lesser percentages for those at lower income levels; changes many deductions and credits used to calculate taxable income; and eliminates in 2019 the penalty imposed on taxpayers who do not obtain the minimum amount of health insurance required under the ACA. The new taxes took effect on 1 January 2018; the tax cut for corporations are permanent, but those for individuals are scheduled to expire after 2025. The Joint Committee on Taxation (JCT) under the Congressional Budget Office estimates that the new law will reduce tax revenues and increase the federal deficit by about $1.45 trillion over the 2018-2027 period. This amount would decline if economic growth were to exceed the JCT’s estimate.

GDP (purchasing power parity)
$19.49 trillion (2017 est.)
$19.06 trillion (2016 est.)
$18.77 trillion (2015 est.)

note: data are in 2017 dollars

GDP (official exchange rate)
$19.49 trillion (2017 est.)
GDP - real growth rate
2.16% (2019 est.)
3% (2018 est.)
2.33% (2017 est.)
GDP - per capita (PPP)
$59,800 (2017 est.)
$58,900 (2016 est.)
$58,400 (2015 est.)

note: data are in 2017 dollars

Gross national saving
18.9% of GDP (2017 est.)
18.6% of GDP (2016 est.)
20.1% of GDP (2015 est.)
GDP - composition, by end use
household consumption: 68.4% (2017 est.)
government consumption: 17.3% (2017 est.)
investment in fixed capital: 17.2% (2017 est.)
investment in inventories: 0.1% (2017 est.)
exports of goods and services: 12.1% (2017 est.)
imports of goods and services: -15% (2017 est.)
GDP - composition by sector
agriculture: 0.9% (2017 est.)
industry: 19.1% (2017 est.)
services: 80% (2017 est.)
Population below poverty line
15.1% (2010 est.)
Labor force
35.412 million (2020 est.)

note: includes unemployed

Labor force - by occupation
agriculture: 0.7% (2009)
industry: 20.3% (2009)
services: 37.3% (2009)
industry and services: 24.2% (2009)
manufacturing: 17.6% (2009)
farming, forestry, and fishing: 0.7% (2009)
manufacturing, extraction, transportation, and crafts: 20.3% (2009)
managerial, professional, and technical: 37.3% (2009)
sales and office: 24.2% (2009)
other services: 17.6% (2009)

note: figures exclude the unemployed

Unemployment rate
3.89% (2018 est.)
4.4% (2017 est.)
Unemployment, youth ages 15-24
total: 8.6%
male: 9.5%
female: 7.7% (2018 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: 3.315 trillion (2017 est.)
expenditures: 3.981 trillion (2017 est.)

note: revenues exclude social contributions of approximately $1.0 trillion; expenditures exclude social benefits of approximately $2.3 trillion

Taxes and other revenues
17% (of GDP) (2017 est.)

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

Budget surplus (+) or deficit (-)
-3.4% (of GDP) (2017 est.)
Public debt
78.8% of GDP (2017 est.)
81.2% of GDP (2016 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 data exclude debt issued by individual US states, as well as intragovernmental debt; intragovernmental debt consists of Treasury borrowings from surpluses in the trusts for Federal Social Security, Federal Employees, Hospital and Supplemental Medical Insurance (Medicare), Disability and Unemployment, and several other smaller trusts; if data for intragovernment debt were added, "gross debt" would increase by about one-third of GDP

Inflation rate (consumer prices)
2.1% (2017 est.)
1.3% (2016 est.)
Central bank discount rate
0.5% (31 December 2010)
0.5% (31 December 2009)
Commercial bank prime lending rate
4.1% (31 December 2017 est.)
3.51% (31 December 2016 est.)
Stock of narrow money
$3.512 trillion (31 December 2017 est.)
$3.251 trillion (31 December 2016 est.)
Stock of broad money
$3.512 trillion (31 December 2017 est.)
$3.251 trillion (31 December 2016 est.)
Stock of domestic credit
$21.59 trillion (31 December 2017 est.)
$20.24 trillion (31 December 2016 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.)
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
2.3% (2017 est.)
Current Account Balance
-$480.225 billion (2019 est.)
-$449.694 billion (2018 est.)
Exports
$1.553 trillion (2017 est.)
$1.456 trillion (2016 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 18.3%, Mexico 15.7%, China 8.4%, Japan 4.4% (2017)
Imports
$2.361 trillion (2017 est.)
$2.208 trillion (2016 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, furniture, toys) (2008 est.)
Imports - partners
China 21.6%, Mexico 13.4%, Canada 12.8%, Japan 5.8%, Germany 5% (2017)
Reserves of foreign exchange and gold
$123.3 billion (31 December 2017 est.)
$117.6 billion (31 December 2015 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
$4.08 trillion (31 December 2017 est.)
$3.614 trillion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$5.711 trillion (31 December 2017 est.)
$5.352 trillion (31 December 2016 est.)
Exchange rates
British pounds per US dollar: 0.7836 (2017 est.), 0.738 (2016 est.), 0.738 (2015 est.), 0.607 (2014 est), 0.6391 (2013 est.)
Canadian dollars per US dollar: 1, 1.308 (2017 est.), 1.3256 (2016 est.), 1.3256 (2015 est.), 1.2788 (2014 est.), 1.0298 (2013 est.)
Chinese yuan per US dollar: 1, 6.7588 (2017 est.), 6.6445 (2016 est.), 6.2275 (2015 est.), 6.1434 (2014 est.), 6.1958 (2013 est.)
euros per US dollar: 0.885 (2017 est.), 0.903 (2016 est.), 0.9214(2015 est.), 0.885 (2014 est.), 0.7634 (2013 est.)
Japanese yen per US dollar: 111.10 (2017 est.), 108.76 (2016 est.), 108.76 (2015 est.), 121.02 (2014 est.), 97.44 (2013 est.)
Fiscal year
1 October - 30 September

Source: CIA World Factbook
This page was last updated on Friday, November 27, 2020

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