The U.S. economy. Detailed description of the current U.S. economy briefly

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The U.S. economy. Detailed description of the current U.S. economy briefly

The US has the most technologically powerful economy in the world, with a per capita GDP of $54,800. In 2014, however, US GDP ran second to China’s, when compared on a Purchasing Power Parity basis; the US lost the top spot, where it had stood for more than a century. 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, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II. 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, has put additional downward pressure on wages and upward pressure on the returns 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. 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. The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn pushed the United States 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, in October 2008 the US Congress established a $700 billion Troubled Asset Relief Program (TARP). 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 the US 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. 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. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries. 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 American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on health care - 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 reduce them further as conditions warranted; the Fed ended the purchases during the summer of 2014. Long-term problems 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.

GDP (purchasing power parity):

$17.46 trillion (2014 est.)

$17.05 trillion (2013 est.)

$16.68 trillion (2012 est.)

note: data are in 2014 US dollars

country comparison to the world: 3

GDP (official exchange rate):

$17.42 trillion (2014 est.)

GDP - real growth rate:

2.4% (2014 est.)

2.2% (2013 est.)

2.3% (2012 est.)

country comparison to the world: 131

GDP - per capita (PPP):

$54,800 (2014 est.)

$53,900 (2013 est.)

$53,100 (2012 est.)

note: data are in 2013 US dollars

country comparison to the world: 19

Gross national saving:

17.3% of GDP (2014 est.)

17% of GDP (2013 est.)

16.3% of GDP (2012 est.)

country comparison to the world: 99

GDP - composition, by end use:

household consumption: 68.7%

government consumption: 18.1%

investment in fixed capital: 15.9%

investment in inventories: 0.4%

exports of goods and services: 13.4%

imports of goods and services: -16.4%

(2014 est.)

GDP - composition, by sector of origin:

agriculture: 1.6%

industry: 20.7%

services: 77.7%

(2014 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 world; petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining

Industrial production growth rate:

2.8% (2014 est.)

country comparison to the world: 103

Labor force:

156 million

note: includes unemployed (2014 est.)

country comparison to the world: 4

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:

6.2% (2014 est.)

7.4% (2013 est.)

country comparison to the world: 65

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)

country comparison to the world: 41

Budget:

revenues: $3.029 trillion

expenditures: $3.52 trillion

note: for the US, revenues exclude social contributions of approximately $1.0 trillion; expenditures exclude social benefits of approximately $2.3 trillion (2014 est.)

Taxes and other revenues:

17.4% 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 (2014 est.)

country comparison to the world: 179

Budget surplus (+) or deficit (-):

-2.8% of GDP (2014 est.)

country comparison to the world: 108

Public debt:

71.2% of GDP (2014 est.)

72.3% of GDP (2013 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 intra-governmental debt; intra-governmental debt consists of Treasury borrowings from surpluses in the trusts for Federal Social Security, Federal Employees, Hospital Insurance (Medicare and Medicaid), Disability and Unemployment, and several other smaller trusts; if data for intra-government debt were added, "Gross Debt" would increase by about one-third of GDP

country comparison to the world: 39

Fiscal year:

1 October - 30 September

Inflation rate (consumer prices):

2% (2014 est.)

1.5% (2013 est.)

Central bank discount rate:

0.5% (31 December 2010)

0.5% (31 December 2009)

country comparison to the world: 142

Commercial bank prime lending rate:

3.3% (31 December 2014 est.)

3.25% (31 December 2013 est.)

country comparison to the world: 168

Stock of narrow money:

$2.943 trillion (31 December 2014 est.)

$2.546 trillion (31 December 2013 est.)

country comparison to the world: 4

Stock of broad money:

$11.79 trillion (31 December 2014 est.)

$10.69 trillion (31 December 2013 est.)

country comparison to the world: 3

Stock of domestic credit:

$18.73 trillion (31 December 2014 est.)

$17.58 trillion (31 December 2013 est.)

country comparison to the world: 2

Market value of publicly traded shares:

$18.67 trillion (31 December 2012 est.)

$15.64 trillion (31 December 2011)

$17.14 trillion (31 December 2010 est.)

country comparison to the world: 1

Current account balance:

-$385.8 billion (2014 est.)

-$400.3 billion (2013 est.)

country comparison to the world: 193

Exports:

$1.61 trillion (2014 est.)

$1.592 trillion (2013 est.)

country comparison to the world: 3

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 19%, Mexico 14.3%, China 7.7%, Japan 4.1% (2013)

Imports:

$2.334 trillion (2014 est.)

$2.295 trillion (2013 est.)

country comparison to the world: 1

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 19.6%, Canada 14.6%, Mexico 12.3%, Japan 6.1%, Germany 5% (2013)

Reserves of foreign exchange and gold:

$144.6 billion (31 December 2013 est.)

$144.6 billion (31 December 2013 est.)

country comparison to the world: 19

Debt - external:

$15.68 trillion (31 December 2012 est.)

$15.51 trillion (31 December 2011 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

country comparison to the world: 2

Stock of direct foreign investment - at home:

$3.258 trillion (31 December 2014 est.)

$2.946 trillion (31 December 2013 est.)

country comparison to the world: 1

Stock of direct foreign investment - abroad:

$5.266 trillion (31 December 2014 est.)

$4.862 trillion (31 December 2013 est.)

country comparison to the world: 1

Exchange rates:

British pounds per US dollar: 0.6003 (2014 est), 0.6391 (2013 est.), 0.6324 (2012 est.), 0.624 (2011 est.), 0.6472 (2010

Canadian dollars per US dollar: (2014 est.), 1.099 (2014 est.), 1.0298 (2013 est.), 0.9992 (2012 est.), 0.9895 (2011 est), 1.0302 (2010 est.)

Chinese yuan per US dollar: (2013 est.), 6.12 (2014 est.), 6.1958(2013 est.), 6.3123 (2012 est.), 6.4615 (20111 est.), 6.7703 (2010 est.)

euros per US dollar: (2012 est.), 0.7489 (2014 est.), 0.7634 (2013 est.), 0.7752 (2012 est.), 0.7185 (2011 est.), 0.755 (2010 est.)

Japanese yen per US dollar: 104.50 (2014 est.), 97.44 (2013 est.), 79.79 (2012 est.), 79.81 (2011 est.), 87.78 (2010)