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The Economy of The United States

American Economy

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Economy - overview: The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $48,000. In this market-oriented economy, 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 largely explains 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. Since 1975, practically all the gains in household income have gone to the top 20% of households. The war in March-April 2003 between a US-led coalition and Iraq, and the subsequent occupation of Iraq, required major shifts in national resources to the military. Hurricane Katrina caused extensive damage in the Gulf Coast region in August 2005, but had a small impact on overall GDP growth for the year. Soaring oil prices between 2005 and the first half of 2008 threatened inflation and unemployment, as higher gasoline prices ate into consumers' budgets. Imported oil accounts for about two-thirds of US consumption. Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups. The merchandise trade deficit reached a record $847 billion in 2007, but declined to $810 billion in 2008, as a depreciating exchange rate for the dollar against most major currencies discouraged US imports and made US exports more competitive abroad. The global economic downturn, the sub-prime mortgage crisis, investment bank failures, falling home prices, and tight credit pushed the United States into a recession by mid-2008. 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 other industrial corporations. In January 2009 the US Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover.

GDP:

GDP - real growth rate: 1.3% (2008 est.) 2% (2007 est.) 2.8% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 1.2% industry: 19.6% services: 79.2% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 2% highest 10%: 30% (2007 est.)

Distribution of family income - Gini index: 45 (2007)

Inflation rate (consumer prices):

Labor force: 155.2 million (includes unemployed) (2008 est.)

Labor force - by occupation: farming, forestry, and fishing 0.6%, manufacturing, extraction, transportation, and crafts 22.6%, managerial, professional, and technical 35.5%, sales and office 24.8%, other services 16.5% note: figures exclude the unemployed (2007)

Unemployment rate: 7.2% (December 2008 est.)

Budget: revenues: $2.524 trillion expenditures: $2.979 trillion (2008 est.)

Industries: leading industrial power in the world, highly diversified and technologically advanced; petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining

Industrial production growth rate: 0.2% (2008 est.)

Electricity - production: 4.167 trillion kWh (2007 est.)

Electricity - production by source:

Electricity - consumption: 3.892 trillion kWh (2007 est.)

Electricity - exports: 20.14 billion kWh (2007 est.)

Electricity - imports: 51.4 billion kWh (2007 est.)

Oil - production: 8.457 million bbl/day (2007 est.)

Oil - consumption: 20.68 million bbl/day (2007 est.)

Oil - exports: 1.165 million bbl/day (2005)

Oil - imports: 13.71 million bbl/day (2005)

Oil - proved reserves: 20.97 billion bbl (1 January 2008 est.)

Natural gas - production: 545.9 billion cu m (2007 est.)

Natural gas - consumption: 652.9 billion cu m (2007 est.)

Natural gas - exports: 23.28 billion cu m (2007 est.)

Natural gas - imports: 130.3 billion cu m (2007 est.)

Natural gas - proved reserves: 5.977 trillion cu m (1 January 2008 est.)

Agriculture - products: wheat, corn, other grains, fruits, vegetables, cotton; beef, pork, poultry, dairy products; fish; forest products

Exports: $1.377 trillion f.o.b. (2008 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% (2003)

Exports - partners: Canada 21.4%, Mexico 11.7%, China 5.6%, Japan 5.4%, UK 4.3%, Germany 4.3% (2007)

Imports: $2.19 trillion f.o.b. (2008 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) (2003)

Imports - partners: China 16.9%, Canada 15.7%, Mexico 10.6%, Japan 7.4%, Germany 4.8% (2007)

Debt - external: $12.25 trillion (30 June 2007)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: British pounds per US dollar: 0.5302 (2008), 0.4993 (2007), 0.5418 (2006), 0.5493 (2005), 0.5462 (2004) Canadian dollars per US dollar: 1.0364 (2008), 1.0724 (2007), 1.1334 (2006), 1.2118 (2005), 1.3010 (2004) Chinese yuan per US dollar: 6.9385 (2008), 7.61 (2007), 7.97 (2006), 8.1943 (2005), 8.2768 (2004) euros per US dollar: 0.6827 (2008), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004) Japanese yen per US dollar: 103.58 (2008), 117.99 (2007), 116.18 (2006) 110.22 (2005), 108.19 (2004)

Fiscal year: