Economy of the United States

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Economy of the United States
Currency United States Dollar (USD)
Fiscal year 1 October - 30 September
Trade organizations NAFTA, WTO, OECD, G-20 and others
GDP $14.26 trillion (2008)[1]
GDP growth 1.1% (2008) / -6.2% (Q4 2008)[1]
GDP per capita $46,800 (2008) (10th)
GDP by sector agriculture (0.9%), industry (20.6%), services (78.5%)
Inflation (CPI) 0.2% (Feb 2008 to Feb 2009)[2]
below poverty line
12.5% (2007)[3]
Labor force 154.5 million (includes unemployed) (May 2008)[4]
Labor force
by occupation
managerial and professional (35.5%), technical, sales and administrative support (24.8%), services (16.5%), manufacturing, mining, transportation, and crafts (24%), farming, forestry, and fishing (0.6%) (excludes unemployed) (2007)
Unemployment 8.5% (March 2009)[5]
Main industries petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, culture, electronics, food processing, consumer goods, lumber, mining, defense
Exports $1.3 trillion f.o.b. (2008)
Export goods industrial supplies, 29.8%; production machinery and equipment, 29.5%; non-auto consumer goods, 12.4%; motor vehicles and parts, 9.3%; food, feed and beverages, 8.3%; aircraft and parts, 6.6%; other, 4.1%. (2008)
Main export partners Canada, 20.1%; Mexico, 11.7%; China, 5.5%; Japan, 5.1%; Germany, 4.2%; United Kingdom, 4.1%.[6]
Imports $2.1 trillion c.i.f. (2008)
Import goods non-auto consumer goods 23.0%; fuels, 22.1%; production machinery and equipment, 19.9%; non-fuel industrial supplies, 14.8%; motor vehicles and parts, 11.1%; food, feed and beverages, 4.2%; aircraft and parts, 1.7%; other 3.2%. (2008)
Main import partners China, 16.1%; Canada, 16.0%; Mexico, 10.3%; Japan, 6.6%; Germany, 4.7%.[6]
Gross External Debt $13.77 trillion (30 June 2008)
Public finances
Public Debt $10.88 trillion (February 2009)[7] 77% of GDP
Revenues $2.523 trillion (2008)[8]
Expenses $3.150 trillion (2008)[8][9]
Economic aid ODA $19 billion, 0.2% of GDP (2004)[10]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars

The economy of the United States is the largest national economy in the world.[11] Its gross domestic product (GDP) was estimated as $14.2 trillion in 2008.[12] The U.S. economy maintains a high level of output per person (GDP per capita, $46,800 in 2008, ranked at around number ten in the world). The U.S. economy has maintained a stable overall GDP growth rate, a low unemployment rate, and high levels of research and capital investment funded by both national and, because of decreasing saving rates, increasingly by foreign investors. In 2008, seventy-two percent of the economic activity in the U.S. came from consumers.[13]

Major economic concerns in the U.S. include external debt, entitlement liabilities for retiring baby boomers who have already begun withdrawing from their Social Security accounts, corporate debt, mortgage debt, a low savings rate, falling house prices, and a large current account deficit. As of September 2008, the gross U.S. external debt was over $13.6 trillion,[14] the most external debt of any country in the world.[15] The 2008 estimate of the United States public debt was 73% of GDP.[16] As of March 2009, the total U.S. federal debt exceeded $10.9 trillion,[7] about $37,850 per capita.

[edit] History

The economic history of the United States has its roots in European settlements in the 16th, 17th, and 18th centuries. The American colonies progressed from marginally successful colonial economies to a small, independent farming economy, which in 1776 became the United States of America. In 230 years the United States grew to a huge, integrated, industrialized economy that makes up over a quarter of the world economy. The main causes were a large unified market, a supportive political-legal system, vast areas of highly productive farmlands, vast natural resources (especially timber, coal and oil), and an entrepreneurial spirit and commitment to investing in material and human capital. In addition, the U.S. was able to exploit these resources due to a unique set of institutions designed to encourage exploration and extraction. As a result, the U.S.'s GDP per capita converged on that of the U.K., as well as other nations that it previously trailed economically. The economy has maintained high wages, attracting immigrants by the millions from all over the world.

[edit] After the Great Depression

For many years following the Great Depression of the 1930s, when the danger of recession appeared most serious, government sought to strengthen the economy by spending heavily itself or cutting taxes so that consumers would spend more, and by fostering rapid growth in the money supply, which also encouraged more spending. In the 1970s, economic woes brought on by the costs of the Vietnam conflict, major price increases, particularly for energy, created a strong fear of inflation. As a result, government leaders came to concentrate more on controlling inflation than on combating recession by limiting spending, resisting tax cuts, and reining in growth in the money supply.

Ideas about the best tools for stabilizing the economy changed substantially between the 1960s and the 1990s. In the 1960s, government had great faith in fiscal policy—manipulation of government revenues to influence the economy. Since spending and taxes are controlled by the president and the U.S. Congress, these elected officials played a leading role in directing the economy. A period of high inflation, high unemployment, and huge government deficits weakened confidence in fiscal policy as a tool for regulating the overall pace of economic activity. Instead, monetary policy assumed growing prominence.

Since the stagflation of the 1970s, the U.S. economy has been characterized by somewhat slower growth.

The worst recession in recent decades, in terms of lost output, occurred in the 1973-75 period of oil shocks, when GDP fell by 3.1 percent, followed by the 1981-82 recession, when GDP dropped by 2.9 percent.[17]

Since the 1970s the US has sustained trade deficits with other nations.

Output fell by 1.3 percent in the 1990-91 downturn, and a tiny 0.3 percent in the 2001 recession. The 2001 downturn lasted just eight months.[17]

In recent years, the primary economic concerns have centered on: high household debt ($14 trillion) including $2.5 trillion in consumer debt,[18] high national debt ($9 trillion), high corporate debt ($9 trillion), high mortgage debt (over $10 trillion as of 2005 year-end), high unfunded Medicare liability ($30 trillion), high unfunded Social Security liability ($12 trillion), high external debt (amount owed to foreign lenders), high trade deficits, and a serious deterioration in the United States net international investment position (NIIP) (-24% of GDP).[19] In 2006, the U.S economy had its lowest saving rate since 1933.[20] These issues have raised concerns among economists and national politicians.[21]

The U.S. economy maintains a relatively high GDP per capita, with the caveat that it may be elevated by borrowing, a low to moderate GDP growth rate, and a low unemployment rate, making it attractive to immigrants worldwide.

The United States entered 2008 during a housing market correction, a subprime mortgage crisis and a declining dollar value.[22] On December 1, 2008, the NBER declared that the United States entered a recession in December 2007, citing employment and production figures as well as the third quarter decline in GDP.[23]

[edit] Overview

United States wealth compared to the rest of the world in the year 2000
Year-on-year change in United States net worth 1946–2007

A central feature of the U.S. economy is the economic freedom afforded to the private sector by allowing the private sector to make the majority of economic decisions in determining the direction and scale of what the U.S. economy produces.[24] This is enhanced by relatively low levels of regulation and government involvement,[25] as well as a court system that generally protects property rights and enforces contracts.

The United States is rich in mineral resources and fertile farm soil, and it is fortunate to have a moderate climate. It also has extensive coastlines on both the Atlantic and Pacific Oceans, as well as on the Gulf of Mexico. Rivers flow from far within the continent, and the Great Lakes—five large, inland lakes along the U.S. border with Canada—provide additional shipping access. These extensive waterways have helped shape the country's economic growth over the years and helped bind America's 50 individual states together in a single economic unit. [26]

The number of unemployed workers and, more importantly, their productivity help determine the health of the U.S. economy. Throughout its history, the United States has experienced steady growth in the labor force, a phenomenon both cause and effect of almost constant economic expansion. Until shortly after World War I, most workers were immigrants from Europe, their immediate descendants, or African Americans who were mostly slaves taken from Africa, or slave descendants. Beginning in the early 20th century, many Latin Americans immigrated; followed by large numbers of Asians following removal of nation-origin based immigration quotas. The promise of high wages brings many highly skilled workers from around the world to the United States.

Labor mobility has also been important to the capacity of the American economy to adapt to changing conditions. When immigrants flooded labor markets on the East Coast, many workers moved inland, often to farmland waiting to be tilled. Similarly, economic opportunities in industrial, northern cities attracted black Americans from southern farms in the first half of the 20th century.

In the United States, the corporation has emerged as an association of owners, known as stockholders, who form a business enterprise governed by a complex set of rules and customs. Brought on by the process of mass production, corporations, such as General Electric, have been instrumental in shaping the United States. Through the stock market, American banks and investors have grown their economy by investing and withdrawing capital from profitable corporations. Today in the era of globalization American investors and corporations have influence all over the world. The American government has also been instrumental in investing in the economy, in areas such as providing cheap electricity (such as from the Hoover Dam), and military contracts in times of war.

While consumers and producers make most decisions that mold the economy, government has a powerful effect on the U.S. economy in at least four areas. Strong government regulation in the U.S. economy started in the early 1900s with the rise of the Progressive Movement; prior to this the government promoted economic growth through protective tariffs and subsidies to industry, built infrastructure, and established banking policies, including the gold standard, to encourage savings and investment in productive enterprises..

[edit] Government intervention

[edit] Regulation and control

The U.S. federal government regulates private enterprise in numerous ways. Regulation falls into two general categories.

[edit] Economic regulation

Some efforts seek, either directly or indirectly, to control prices. Traditionally, the government has sought to prevent monopolies such as electric utilities from raising prices beyond the level that would ensure them extremely large profits. At times, the government has extended economic control to other kinds of industries as well. In the years following the Great Depression, it devised a complex system to stabilize prices for agricultural goods, which tend to fluctuate wildly in response to rapidly changing supply and demand. A number of other industries—trucking and, later, airlines—successfully sought regulation themselves to limit what they considered as harmful price cutting.

Another form of economic regulation, antitrust law, seeks to strengthen market forces so that direct regulation is unnecessary. The government—and, sometimes, private parties—have used antitrust law to prohibit practices or mergers that would unduly limit competition.

Bank regulation in the United States is highly fragmented compared to other G10 countries where most countries have only one bank regulator. In the U.S., banking is regulated at both the federal and state level. The U.S also has one of the most highly regulated banking environments in the world; however, many of the regulations are not safety and soundness related, but are instead focused on privacy, disclosure, fraud prevention, anti-money laundering, anti-terrorism, anti-usury lending, and promoting lending to lower-income segments.

[edit] Monetary policy
United States historical inflation rate 1666–2004

The federal government attempts to use both monetary policy (control of the money supply through mechanisms such as changes in interest rates) and fiscal policy (taxes and spending) to maintain low inflation, high economic growth, and low unemployment. A relatively independent central bank, known as the Federal Reserve, was formed in 1913 to provide a stable currency and monetary policy. The U.S. dollar has been regarded as one of the most stable currencies in the world and many nations back their own currency with U.S. dollar reserves. During the last few years, the U.S. dollar has gradually depreciated in value and its reserve currency status is no longer as high as previously.

The dollar used gold standard and/or silver standard from 1785 until 1975, when it became a fiat currency.

[edit] Money supply
Components of US money supply (currency, M1, M2, and M3) since 1959

The most common measures are named M0 (narrowest), M1, M2, and M3. In the United States they are defined by the Federal Reserve as follows:

The Federal Reserve ceased publishing M3 statistics in March 2006, explaining that data does not provide useful information and as a result "the costs outweigh the benefits". They still release some of the separate statistics that were included in the M3.[27] The other three money supply measures continue to be provided in detail.

[edit] Social regulations

Since the 1970s, government has also exercised control over private companies to achieve social goals, such as improving the public's health and safety or maintaining a healthy environment. For example, the Occupational Safety and Health Administration provides and enforces standards for workplace safety, and in the case of the United States Environmental Protection Agency provides standards and regulations to maintain air, water, and land resources. The U.S. Food and Drug Administration regulates what drugs may reach the market, and also provides standards of disclosure for food products.

American attitudes about regulation changed minimally during the final three decades of the 20th century. Beginning in the 1970s, policy makers grew increasingly satisfied that economic regulation protected efficient companies at the expense of consumers in industries such as airlines and trucking. At the same time, technological changes spawned new competitors in some industries, such as telecommunications, that once were considered natural monopolies. Both developments led to a succession of laws easing regulation.

While leaders of America's two most influential political parties generally favored economic deregulation during the 1970s, 1980s, and 1990s, there was less agreement concerning regulations designed to achieve social goals. Social regulation had assumed growing importance in the years following the Depression and World War II, and again in the 1960s and 1970s. During the 1980s, the government relaxed labor, consumer and environmental rules based on the idea that such regulation interfered with free enterprise, increased the costs of doing business, and thus contributed to inflation. The response to such changes is mixed; many Americans continued to voice concerns about specific events or trends, prompting the government to issue new regulations in some areas, including environmental protection.

Where legislative channels have been unresponsive, some citizens have turned to the courts to address social issues more quickly. For instance, in the 1990s, individuals, and eventually the government itself, sued tobacco companies over the health risks of cigarette smoking. The 1998 Tobacco Master Settlement Agreement provided states with long-term payments to cover medical costs to treat smoking-related illnesses.

[edit] Direct services

Each level of government provides many direct services. The federal government, for example, is responsible for national defense, backs research that often leads to the development of new products, conducts space exploration, and runs numerous programs designed to help workers develop workplace skills and find jobs (including higher education). Government spending has a significant effect on local and regional economies—and even on the overall pace of economic activity.

State governments, meanwhile, are responsible for the construction and maintenance of most highways. State, county, or city governments play the leading role in financing and operating public schools. Local governments are primarily responsible for police and fire protection.

Overall, federal, state, and local spending accounted for almost 28% of gross domestic product in 1998.[28]

[edit] Direct assistance

Government also provides many kinds of help to businesses and individuals. It offers low-interest loans and technical assistance to small businesses, and it provides loans to help students attend college. Government-sponsored enterprises buy home mortgages from lenders and turn them into securities that can be bought and sold by investors, thereby encouraging home lending. Government also actively promotes exports and seeks to prevent foreign countries from maintaining trade barriers that restrict imports.

Social Security, which is financed by a tax on employers and employees, accounts for the largest portion of Americans' retirement income. The Medicare program pays for many of the medical costs of the elderly. The Medicaid program finances medical care for low-income families. In many states, government maintains institutions for the mentally ill or people with severe disabilities. The federal government provides food stamps to help poor families obtain food, and the federal and state governments jointly provide welfare grants to support low-income parents with children.

Many of these programs, including Social Security, trace their roots to the New Deal programs of Franklin D. Roosevelt, who served as the U.S. president from 1933 to 1945.

Many other assistance programs for individuals and families, including Medicare and Medicaid, were begun in the 1960s during President Lyndon Johnson's (1963–1969) War on Poverty. Although some of these programs encountered financial difficulties in the 1990s and various reforms were proposed, they continued to have strong support from both of the United States' major political parties. Critics argued, however, that providing welfare to unemployed but healthy individuals actually created dependency rather than solving problems. Welfare reform legislation (the Personal Responsibility and Work Opportunity Act) passed in 1996 under President Bill Clinton (1993–2001) and a Republican Congress requires people to work, job search, enter training, or receive education as a condition of receiving benefits and imposes federal limits on how long individuals may receive payments (states may adopt stronger limits).

[edit] National budget

[edit] National debt

As of January 20, 2009, the total U.S. federal debt was $10.627 trillion (an increase of 85.5 percent over the previous eight years). [29]

The borrowing cap debt ceiling as of 2005 stood at $8.18 trillion.[30] In March 2006, Congress raised that ceiling an additional $0.79 trillion to $8.97 trillion, which is approximately 68% of GDP.[31] Congress has used this method to deal with an encroaching debt ceiling in previous years, as the federal borrowing limit was raised in 2002 and 2003.[32] As of October 4, 2008, the "The Emergency Economic Stabilization Act of 2008" raised the current debt ceiling to US$ 11.3 trillion.[33]

While the U.S. national debt is the world's largest in absolute size, another measure is its size relative to the nation's GDP. As of January 20, 2009, the debt was 73 percent of GDP, a level not seen in the U.S. since 1955 when the country was recovering from World War II. [34] This debt is still less than the debt of other industrialized nations such as Japan and roughly equivalent to those of several western European nations.[35]

[edit] Sectors

Sales per sector compared to employees per sector in the United States economy in the year 2002
Sectors of the US economy ranked by number of sales, receipts, or shipments in the year 2002. Includes both employers and nonemployers
Sectors of the U.S. Economy in 2002 - firms with payroll - All Sector Totals[36]
Sector Establishments Sales, receipts, or
shipments ($1,000)
Annual payroll
Mining 24,087 182,911,093 21,173,895 477,840
Utilities 17,103 398,907,044 42,417,830 663,044
Construction 710,307 1,196,555,587 254,292,144 7,193,069
Manufacturing 350,828 3,916,136,712 576,170,541 14,699,536
Wholesale trade 435,521 4,634,755,112 259,653,080 5,878,405
Retail trade 1,114,637 3,056,421,997 302,113,581 14,647,675
Transportation & warehousing 199,618 382,152,040 115,988,733 3,650,859
Information 137,678 891,845,956 194,670,163 3,736,061
Finance & insurance 440,268 2,803,854,868 377,790,172 6,578,817
Real estate & rental & leasing 322,815 335,587,706 60,222,584 1,948,657
Professional, scientific, & technical services 771,305 886,801,038 376,090,052 7,243,505
Management of companies & enterprises 49,308 107,064,264 178,996,060 2,605,292
Administrative & support & waste management & remediation service 350,583 432,577,580 206,439,329 8,741,854
Educational services 49,319 30,690,707 10,164,378 430,164
Health care & social assistance 704,526 1,207,299,734 495,845,829 15,052,255
Arts, entertainment, & recreation 110,313 141,904,109 45,169,117 1,848,674
Accommodation & food services 565,590 449,498,718 127,554,483 10,120,951
Other services (except public administration) 537,576 307,049,461 82,954,939 3,475,310
Totals 6,891,382 21,362,013,726 3,727,706,910 108,991,968

Industrial production growth rate: -11.2% (2009 est.)[37]


  • production: 4.157 trillion kWh (2007)[38]
  • consumption: 3.924 trillion kWh (2007)
  • exports: 22.9 billion kWh (2004)
  • imports: 34.21 billion kWh (2004)

Electricity - production by source:[39]

  • fossil fuel: 69%
  • hydro: 6.4%
  • nuclear: 19.4%
  • other: 3.3% (2008)


  • production: 5.064 million barrel/day (2009 est.)
  • consumption: 20.68 million barrel/day (2009 est.)
  • exports: 1.433 million barrel/day (2009 est.)
  • imports: 10.03 million barrel/day (2009 est.)
  • net imports: 8.6 million barrel/day
  • proved reserves: 21.32 billion barrel (1 January 2008)

Natural gas:[41]

  • production: 545.9 billion cu m (2007 est.)
  • consumption: 653 billion cu m (2007 est.)
  • exports: 23.28 billion cu m (2007 est.)
  • imports: 130.5 billion cu m (2007 est.)
  • proved reserves: 6.731 trillion cu m (31 December 2007 est.)

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

Exports - commodities: capital goods, automobiles, industrial supplies and raw materials, consumer goods, agricultural products

Imports - commodities: crude oil and refined petroleum products, machinery, automobiles, consumer goods, industrial raw materials, food and beverages

[edit] Agriculture

Agriculture is a major industry in the United States and the country is a net exporter of food.

[edit] Manufacturing

USA is the leading manufacturer in the world with a 2007 industrial output of US$2,696,880 millions. Main industries are petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, mining.

[edit] Financial

Total US derivatives and total US wealth 1995–2007 compared to total world wealth in the year 2000

[edit] International trade

[edit] External debt: Liabilities to foreigners

Account balance as of 2006[42]

Gross U.S. liabilities to foreigners are $16.3 trillion as of the end of 2006 (over 100% of GDP). The U.S. Net International Investment Position (NIIP)[43] deteriorated to a negative $2.5 trillion at the end of 2006,[44] or about minus 19% of GDP.

This figure rises as long as the US maintains an imbalance in trade, when the value of imports substantially outweighs the value of exports. This external debt does not result mostly from loans to Americans or the American government, nor is it consumer debt owed to non-US creditors. It is an accounting entry that largely represents US domestic assets purchased with trade dollars and owned overseas, largely by US trading partners.[45] For countries like the United States, a large net external debt is created when the value of foreign assets (debt and equity) held by domestic residents is less than the value of domestic assets held by foreigners. In simple terms, as foreigners buy property in the US, this adds to the external debt. When this occurs in greater amounts than Americans buying property overseas, nations like the United States are said to be debtor nations, but this is not conventional debt like a loan obtained from a bank.[43]

If the external debt represents foreign ownership of domestic assets, the result is that rental income, stock dividends, capital gains and other investment income is received by foreign investors, rather than by U.S. residents. On the other hand, when American debt is held by overseas investors, they receive interest and principal repayments. As the trade imbalance puts extra dollars in hands outside of the U.S., these dollars may be used to invest in new assets (foreign direct investment, such as new plants) or be used to buy existing American assets such as stocks, real estate and bonds. With a mounting trade deficit, the income from these assets increasingly transfers overseas.

Of major concern is the magnitude of the NIIP (or net external debt), which is larger than those of most national economies. Fueled by the sizable trade deficit, the external debt is so large that many[who?] wonder if the trade situation can be sustained in the long term. A complicating factor is that trading partners such as China, depend for much of their economy on exports, especially to America. There are many controversies about the current trade and external debt situation, and it is arguable whether anyone understands how these dynamics will play out in a historically unprecedented floating exchange rate system. While various aspects of the U.S. economic profile have precedents in the situations of other countries (notably government debt as a percentage of GDP), the sheer size of the U.S., and the integral role of the US economy in the overall global economic environment, create considerable uncertainty about the future.[citations needed]

According to economists such as Larry Summers and Paul Krugman, the enormous inflow of capital from China is one of the causes of the global financial crisis of 2008–2009. China had been buying huge quantities of dollar assets to keep its currency value low and its export economy humming, which caused American interest rates and saving rates to remain artificially low. These low interest rates, in turn, contributed to the United States housing bubble because when mortgages are cheap, house prices are inflated as people can afford to borrow more.[46][47]

[edit] Trade agreements

     The United States      Current Bilateral/Multilateral FTA's      Proposed Bilateral/Multilateral FTA's

The U.S. is a member of several international trade organizations. The purpose of joining these organizations is to come to agreement with other nations on trade issues, although there is some disagreement among U.S. citizens as to whether or not the U.S. government should be making these trade agreements in the first place.

[edit] Imports and exports

The United States is the most significant nation in the world when it comes to international trade. For decades, it has led the world in imports while simultaneously remaining as one of the top three exporters of the world.

As the major epicenter of world trade, the United States enjoys leverage that many other nations do not. For one, since it is the world's leading consumer, it is the number one customer of companies all around the world. Many businesses compete for a share of the United States market. In addition, the United States occasionally uses its economic leverage to impose economic sanctions in different regions of the world. USA is the top export market for almost 60 trading nations worldwide.

Since it is the world's leading importer, there are many U.S. dollars in circulation all around the planet. The stable U.S. economy and fairly sound monetary policy has led to faith in the U.S. dollar as the world's most stable currency.

In order to fund the national debt (also known as public debt), the United States relies on selling U.S. treasury bonds to people both inside and outside the country, and in recent times the latter have become increasingly important. Much of the money generated for the treasury bonds came from U.S. dollars which were used to purchase imports in the United States.

[edit] US trade by nation

US trade of goods by nation in 2004 (services not included)
Exports[48] Imports[49]
Nation Millions of dollars Percentage Cumulative Percentage Nation Millions of dollars Percentage Cumulative Percentage
Canada 189,101 23.12% 23.12% Canada 255,928 17.41% 17.41%
Mexico 110,775 13.54% 36.66% China 196,699 13.38% 30.80%
Japan 54,400 6.65% 43.31% Mexico 155,843 10.60% 41.40%
United Kingdom 35,960 4.40% 47.71% Japan 129,595 8.82% 50.22%
China 34,721 4.24% 51.95% Germany 77,236 5.26% 55.48%
Germany 31,381 3.84% 55.79% United Kingdom 46,402 3.16% 58.63%
South Korea 26,333 3.22% 59.01% South Korea 46,163 3.14% 61.77%
Netherlands 24,286 2.97% 61.98% Taiwan, ROC 34,617 2.36% 64.13%
Taiwan 21,731 2.66% 64.64% France 31,814 2.16% 66.29%
France 21,240 2.60% 67.23% Malaysia 28,185 1.92% 68.21%
Singapore 19,601 2.40% 69.63% Italy 28,089 1.91% 70.12%
Belgium 16,877 2.06% 71.69% Ireland 27,442 1.87% 71.99%
Hong Kong 15,809 1.93% 73.63% Venezuela 24,962 1.70% 73.69%


14,271 1.74% 75.37%


21,157 1.44% 75.13%


13,863 1.69% 77.07%

Saudi Arabia

20,924 1.42% 76.55%


12,095 1.55% 86.16%


17,577 1.20% 77.75%


10,897 1.33% 78.40%


16,246 1.11% 78.85%


10,711 1.31% 79.71%


15,562 1.06% 79.91%


9,268 1.13% 80.84%


15,306 1.04% 80.95%


9,198 1.12% 81.96%


14,527 0.99% 81.94%


8,166 1.00% 82.96%


12,687 0.86% 82.81%


7,072 0.86% 83.83%


12,605 0.86% 83.66%


6,641 0.81% 84.64%


12,448 0.85% 84.51%


6,363 0.78% 85.42%


11,847 0.81% 85.32%

Saudi Arabia

5,245 0.64% 86.80%


11,643 0.79% 86.11%


4,782 0.58% 87.39%


10,811 0.74% 86.84%


4,504 0.55% 87.94%

Hong Kong

9,314 0.63% 87.48%

Dominican Republic

4,343 0.53% 88.47%


9,144 0.62% 88.10%

United Arab Emirates

4,064 0.50% 88.97%


8,514 0.58% 88.68%


3,625 0.44% 89.41%


7,544 0.51% 89.19%


3,386 0.41% 89.82%


7,476 0.51% 89.70%


3,361 0.41% 90.24%


7,409 0.50% 90.21%

Costa Rica

3,304 0.40% 90.64%


7,290 0.50% 90.70%


3,265 0.40% 91.04%

South Africa

3,172 0.39% 91.43%


3,105 0.38% 91.81%

Others 67,023 8.19% 100.00% Others 136,661 9.30% 100.00%
Total Exports: 817,939

Total Imports: 1,469,667

[edit] Wealth

[edit] Distribution of wealth

U.S. mean family net worth by percentile of net worth (1989–2004)

[edit] Poverty

There is significant disagreement about poverty in the United States, particularly over how poverty ought to be defined. Using radically different definitions, two major groups of advocates have claimed variously that (a) the United States has eliminated poverty over the last century;[50] or (b) it has such a severe poverty crisis that it ought to devote significantly more resources to the problem.[citation needed] The debate includes how poverty should be defined.

Measures of poverty can be either absolute or relative. Absolute poverty is defined in real dollar values, whereas relative poverty is a comparison of the highest to the lowest standard of living at a particular time period.

[edit] Personal income

Median income levels
Households Persons, age 25 or older with earnings Household income by race
All households Dual earner
Per household
Males Females Both sexes Asian White,
Hispanic Black
$46,326 $67,348 $23,535 $39,403 $26,507 $32,140 $57,518 $48,977 $34,241 $30,134
Median personal income by educational attainment
Measure Some High School High school graduate Some college Associate's degree Bachelor's degree or higher Bachelor's degree Master's degree Professional degree Doctorate degree
Persons, age 25+ w/ earnings $20,321 $26,505 $31,054 $35,009 $49,303 $43,143 $52,390 $82,473 $70,853
Male, age 25+ w/ earnings $24,192 $32,085 $39,150 $42,382 $60,493 $52,265 $67,123 $100,000 $78,324
Female, age 25+ w/ earnings $15,073 $21,117 $25,185 $29,510 $40,483 $36,532 $45,730 $66,055 $54,666
Persons, age 25+, employed full-time $25,039 $31,539 $37,135 $40,588 $56,078 $50,944 $61,273 $100,000 $79,401
Household $22,718 $36,835 $45,854 $51,970 $73,446 $68,728 $78,541 $100,000 $96,830
Household income distribution
Bottom 10% Bottom 20% Bottom 25% Middle 33% Middle 20% Top 25% Top 20% Top 5% Top 1.5% Top 1%
$0 to $10,500 $0 to $18,500 $0 to $22,500 $30,000 to $62,500 $35,000 to $55,000 $77,500 and up $92,000 and up $167,000 and up $250,000 and up $350,000 and up
Source: US Census Bureau, 2006; income statistics for the year 2005
This graphic shows the distribution of gross annual household income. The floors above the top black line represent those households with incomes of or exceeding $100,000. The floors below the bottom black line represent those households below the poverty threshold. In order to live on the top floor of the American income strata, a household's annual gross income must exceed $200,000.

[edit] Distribution of income

Before-tax U.S. family income distribution 1989–2004 (mean)

[edit] Income inequality

The United Nations Development Programme Report 2006 on income equality ranks the United States as tied for 73rd out of 126 countries, as measured by the Gini coefficient. (See List of countries by income equality.) The Gini coefficient for the U.S. was 45 in 2007, according to the CIA. The richest 10% make 16 times as much as the poorest 10%, and the richest 20% make 8 times as much as the poorest 20%. (See List of countries by income equality.)

[edit] International comparison

Country Median household income national currency units Year PPP rate (OECD) Median household income (PPP)
Switzerland[51] 95,184 CHF 2005 1.74 $55,000
California, US[52] US State $54,000
United States 48,000 USD 2006 1.00 $48,000
Canada [53] 53,634 CAD 2005 1.21 $44,000
New Zealand [54] 62,556 NZD 2007 1.54 $41,000
United Kingdom [55] 24,700 GBP 2004 0.632 $39,000
Australia[56] 53,404 AUD 2006 1.41 $38,000
Israel[57] 107,820 ILS 2006 2.90 $37,000
Ireland 35,410 EUR 2005 1.02 $35,000
United Kingdom[58]
21,892 GBP 2005 0.649 $34,000
West Virginia, US[59] US state $33,000
Hong Kong[60] 186,000 HKD 2005 5.96 $31,000
Singapore[61] 45,960 SGD 2005 1.55 $30,000

[edit] Unemployment

Unemployment rate as a percentage of the labor force in the United States according to the U.S. Bureau of Labor Statistics.
Unemployment rate for US states in December 2008

In February 2009, the unemployment rate was 8.1%. [62] Female unemployment continued to be significantly lower than male unemployment at 6.7%. Black unemployment continues to be much higher than white unemployment alomost double at 13.4% compared to 7.3% white unemployment. It was only recently that the unemployment rate increased steadily. Unemployment rates have not been this high since August 1992.[63]

The Congressional Budget Office forecast that the unemployment rate could reach as high as 9% during 2010.[64]

[edit] The effect of military expenditure

Most economic models have shown that military spending by the United States Government has diverted resources from productive uses such as consumption and investment, which has ultimately slowed growth and reduced employment.[65] Estimates project that by 2017 the Iraq War and War in Afghanistan will have cost the U.S. budget between $1.7 trillion and $2.7 trillion. Interest on money borrowed to pay those costs could alone add a further $816 billion to that bottom line. Nobel Prize-winning economist Joseph E. Stiglitz even says that estimating all economic and social costs might push the U.S. war bill up toward $5 trillion by 2017. This figure includes the cost to the U.S. economy of global oil prices that have quadrupled since 2003, an increase blamed partly on the Iraq war.[66]

U.S. forces in Helmand Province, Afghanistan, 2007

Proponents of the military actions of the United States reference the cost of the wars as a percent of national GDP. With a military budget of 4.06% of GDP,[67] the relative cost and impact to the economy is far less than at nearly any other time in the last 60 years, with military expenses topping at 37.8% of GDP in 1944 and 6.2% of GDP in 1986; with a low point of 3.0% in 2000, prior to the attacks of September 11, 2001. [68]

[edit] Economic predictions and forecasting

Predictions about the direction of the United States economy in the short term and long term are crucial factors in determining federal government policies, business decisions, and Federal Reserve decisions. Several institutions make economic predictions, including: Global Insight, and the UCLA Anderson Forecast. Various state agencies, including the California Department of Finance, also make predictions.

[edit] Other statistics

Historic exchange rates:

  Jan 2008 Jan 2007 Jan 2006 Jan 2005 Jan 2004 Jan 2003 Jan 2002 2001* 2000* 1999* 1998 1997
Canadian dollars per U.S. dollar 0.982 1.165 1.164 1.204 1.293 1.576 1.600 1.548 1.485 1.485 1.483 1.384
Japanese yen per U.S. dollar 112.1 119.0 118.1 102.5 107.2 118.7 132.6 121.5 107.7 113.9 130.9 120.9
Euros per US dollar 0.6803 0.7577 0.8444 0.7387 0.7939 0.9534 1.128 1.062 0.9947 0.8557 - -
British pounds per U.S. dollar 0.5009 0.5104 0.5812 0.5209 0.5600 0.6212 0.6981 0.6944 0.6596 0.6180 0.6037 0.6106
Chinese renminbi[69] per U.S. dollar 7.3141 7.8175 8.0755 8.2865 8.2867 8.2871 8.2867 8.2782 8.2803 8.2789 8.2796 8.2982
French francs per U.S. dollar - - - - - - - - - 5.65 5.899 5.836
Italian lire per U.S. dollar - - - - - - - - - 1,668.7 1,763.2 1,703.1
German deutschmarks per U.S. dollar - - - - - - - - - 1.69 1.969 1.734
Note: financial institutions in France, Italy, Germany, and eight other European countries started using the euro on 1 January 1999, with the euro replacing the local currency for all transactions in 2002. Their 1999 figures are for January.
*January 1 exchange rates

[edit] References

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[edit] See also

[edit] External links

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