Economy of USA

Economy of USA Place in global Economy. The United States of America is the world's largest national economy, representing 22.4% of nominal global GDP and 16.6% of global GDP The United States' GDP was estimated to be $17.555 trillion as of Q3 2014. The U.S. dollar is the currency most used in international transactions and is the world's foremost reserve currency. Several countries use it as their official currency, and in many others it is the de facto currency. The United States has a mixed economy and has maintained a stable overall GDP growth rate, a moderate unemployment rate, and high levels of research and capital investment. Its six largest trading partners are Canada, China, Mexico, Japan, Germany, and South Korea. The US has abundant natural resources, a well-developed infrastructure, and high productivity. It has the world's ninth-highest per capita GDP (nominal) and tenth-highest per capita GDP (PPP) as of 2013. The U.S. is the world's largest producer of oil and natural gas. It is the second-largest trading nation in the world as well as the world's second largest manufacturer, representing a fifth of the global manufacturing output. Of the world's 500 largest companies, 128 are headquartered in the US. The United States has one of the world's largest and most influential financial markets. The New York Stock Exchange is by far the world's largest stock exchange by market capitalization. The United States has the largest consumer market in the world, with a household final consumption expenditure five times larger than Japan's. The labor market has attracted immigrants from all over the world and its net migration rate is among the highest in the world. The US economy is currently embroiled in the economic downturn which followed the financial crisis of 2007–08, with output still below potential according to the Congressional Budget Office. The economy, however, began to recover in the second half of 2009, and as of October 2014, unemployment had declined from a high of 10% to 5.8%; The gap in income between rich and poor is greater in the United States than in any other developed country. In December 2013, the total of the public debt was about 0.7 times GDP. Composition of Economic Sectors The United States is the world's largest manufacturer, with a 2013 industrial output of US$2.4 trillion. Its manufacturing output is greater than of Germany, France, India, and Brazil combined. Its main industries include petroleum, steel, automobiles, construction machinery, aerospace, agricultural machinery, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, and mining. The US leads the world in airplane manufacturing, which represents a large portion of US industrial output. American companies such as Boeing, Cessna, Lockheed Martin, and General Dynamics produce a vast majority of the world's civilian and military aircraft in factories stretching across the United States. The manufacturing sector of the U.S. economy has experienced substantial job losses over the past several years. The U.S. produces approximately 18% of the world's manufacturing output, a share that has declined as other nations developed competitive manufacturing industries. In addition, growth in telecommunications, pharmaceuticals, aircraft, heavy machinery and other industries along with declines in low end, low skill industries such as clothing, toys, and other simple manufacturing have resulted in some U.S. jobs being more highly skilled and better paying. There has been much debate within the United States on whether the decline in manufacturing jobs are related to American unions, lower foreign wages, or both. Although agriculture comprises less than two percent of the economy, the United States is a net exporter of food. With vast tracts of temperate arable land, technologically advanced agribusiness, and agricultural subsidies, the United States controls almost half of world grain exports. Products include wheat, corn, other grains, fruits, vegetables, cotton; beef, pork, poultry, dairy products; forest products; fish. Biggest Companies In 2013, eight of the world's ten largest companies by market capitalization were American: Apple Inc., Exxon Mobil, Berkshire Hathaway, Wal-Mart, General Electric, Microsoft, IBM, and Chevron Corporation. Apple, Google, IBM, McDonald's, and Microsoft are the world's five most valuable brands in an index published by Millward Brown. 32% of retailers were based in the United States. Amazon.com is the world's largest online retailer. Most of the world's largest charitable foundations were founded by Americans. American producers create nearly all of the world's highest-grossing films. Many of the world's best-selling music artists are based in the United States. U.S. tourism sector welcomes approximately 60 million international visitors every year. Manufacturing Manufacturing is the single most important sector of the American economy. It employs roughly a fifth of the nation's labor force and produces about a fifth of the gross domestic product. The United States produces an enormous range of both consumer and industrial goods. No other country equals it in total production and consumption of manufactured items. By most indicators of industrial strength, such as the production of steel, cement, and chemicals, the United States ranks among the world's top producing nations. Advanced technology has contributed heavily to the United States' preeminent position, especially since the early 1900's. In the late 1990s the United States lead a number of advanced technology fields, such as pharmaceuticals, biotechnology, and aerospace. The Midwest and the South are the chief manufacturing regions, each contributing about one-third of the nation's output, in terms of value added by manufacture; the Northeast contributes almost one-fourth, and the West accounts for the remainder. California, New York, Ohio, Texas, Illinois, and Michigan are the leading manufacturing states. A growing trend among many American companies, especially since the early 1980's, has been to move manufacturing and assembling operations to foreign countries, where labor is cheaper. From there finished goods are shipped back to the United States or to other destinations. The chief manufactured products, by groups, are transportation equipment, foods, chemicals, machinery, electrical and electronic equipment, printed materials, fabricated metal products, instruments, paper and paper products, and primary metals. (These groupings are based on those used by the U.S. Department of Commerce in its periodic Survey of Manufactures and are somewhat arbitrary.) Transportation Equipment The manufacturing of automobiles, trucks, recreational vehicles, and related parts and equipment is the nation's leader in terms of value added by manufacture. It centers in the Great Lakes area, especially in Detroit and other cities of southeastern Michigan. There are also large assembly plants elsewhere, especially in other parts of the Midwest and in California. The production of aerospace equipment, including airplanes and space vehicles, is a considerably smaller industry by value and employment than that of motor vehicles. Major centers of production are on the Pacific Coast, mainly in or near Seattle and Los Angeles. America's shipbuilding industry is small and unable to compete on a cost basis with large foreign builders. It survives at a number of coastal locations, from Maine to California, largely because of federal expenditures for naval vessels. Foods Feeding America's huge population requires a giant food-processing industry. Some foods, such as dairy products, are processed in all parts of the country; others, such as meat, fruit, and vegetables, are processed mainly in major producing areas. Meat processing and packing is done mainly in the Midwest and in Texas and California. The canning and freezing industry is largest on the Atlantic Coast, in the Great Lakes states, and on the Pacific Coast. Chemicals Chemical manufacturing yields such products as industrial chemicals, drugs, plastics, and soaps and cleaners. Production takes place in many parts of the nation, but is most heavily concentrated in the Northeast, especially in New York, New Jersey, and Pennsylvania, and in Illinois, Ohio, and Michigan. Large chemical plants are also located along the Texas and Louisiana coast and in California. Machinery The machinery group, the nation's leader until the early 1980's, consists primarily of machines for farms, mines, construction, factories, offices, and homes. Electronic computers and related equipment make up the most valuable single category in this group. The Northeast and the Great Lakes states lead in the production of most kinds of machinery. California, Massachusetts, New York, and Minnesota are the principal states in the manufacturing of electronic computing equipment. Electric and Electronic Equipment Manufactured goods in this group include home appliances; electric lighting equipment; transformers; motors; generators; and radio, television, telephone, and other communications equipment. The manufacturing of these and related products is done mostly in the Northeast and in the Midwest. However, the making of electronic components, chief of which are semiconductors, centers primarily in California, New York, Pennsylvania, and Texas. Printed Materials The printing industry in the United States is large and diversified. Packaging materials, newspapers, periodicals, books, and business forms are the chief products. All large cities and most smaller ones have printing plants. By far the largest center is the New York City area. Agriculture The United States is one of the world's leading agricultural nations even though the relative importance of agriculture in the economy has declined steadily over the years. Farming now accounts for less than 3 per cent of the nation's labor force and about 2 per cent of the gross national product. Nevertheless, it makes the nation virtually self-sufficient in food and, by value, provides about one-eighth of the nation's exports of merchandise. In the production of many farm commodities the United States ranks among the world's top producing countries. Among these products are corn, wheat, cotton, soybeans, peanuts, tobacco, citrus fruit, meat, milk, and eggs. Since the 1930's agriculture has been marked by a large decline in the number of farms and a sharp rise in the average farm size. In the late 1980's there were about 2,170,000 farms; the average farm size was 460 acres (186 hectares). Large farms, those with more than 1,000 acres (405 hectares), account for roughly 60 per cent of all land in farms. Many of the largest farms are owned by corporations. Owners of small farms, because of high operating costs, often have difficulty in making a reasonable profit. In general, agriculture is highly mechanized. Scientific methods of cultivation and livestock breeding are widely used. Hybrid seeds, chemical fertilizers, insecticides, and fungicides have contributed greatly to high crop yields. The average yield of corn per acre, for example, has tripled since the early 1940's. By value, the leading farm products in the United States are cattle, milk, corn, soybeans, hay, and hogs. The Midwest is the nation's leading agricultural region. It is the chief producer of corn, hogs, and soybeans and is a major producer of cattle, milk, wheat and other grains, and many fruits and vegetables. New England is predominantly a dairying area. Farther south along the Atlantic seaboard, from New York to Maryland, farming is more varied. Among the items produced are dairy products, cattle, truck crops, and broilers. Farming is also varied in the South, where cattle, soybeans, corn, tobacco, broilers, cotton, peanuts, dairy products, citrus fruit, and rice are among the chief farm products. Cotton, once the Smith's predominant crop, is the leading farm product only in Mississippi. Throughout the Great Plains the raising of cattle and wheat prevails. Cattle are the chief source of farm income in most states in and west of the Rocky Mountains. Irrigation is practiced on the Great Plains and in the West. Highly specialized kinds of irrigated farming are practiced in parts of the West, particularly in California. By value of production, California is the nation's leading agricultural state. California produces dairy products, cotton, and many kinds of vegetables, fruits, and nuts in addition to cattle. Fishing and Forestry Fishing The fisheries of the United States are among the largest and most productive in the world. The United States has exclusive fishing rights in the area extending seaward 200 nautical miles (370 km) from the Atlantic, Gulf, and Pacific coasts, which total some 12,300 miles (19,800 km) in length. The United States also fishes in international waters, beyond the 200-mile limit. The catch consists of both edible and inedible fish; the latter are processed mainly into meal and oil for industrial and agricultural use. Chief among the edible species, by total value, are salmon, shrimp, crabs, tuna, lobster, and oysters. Most of this catch is marketed fresh or frozen; the rest is marketed canned or cured. By tonnage, the catch of menhaden, an inedible species, surpasses that of any other fish, accounting, on the average, for roughly a fifth of the nation's total catch. The Pacific catch accounts for nearly three-fifths of the total tonnage of fish caught; Atlantic and Gulf catches account for about a fifth each. The Pacific catch also leads in value of fish caught. Alaska and Louisiana are the top fishing states. Commercial fishing on the Great Lakes is of limited significance, both in quantity and in value of the catch. Forestry The West, with its vast evergreen forests, is the principal timber-producing area of the United States. Much of the lumbering there is done in large, scientifically managed forests owned by corporations. Vast tracts of federally owned land are also used for commercial production. Prominent among the species felled in the Western states—mainly for lumber and plywood—are Douglas fir, true firs, western hemlock, Ponderosa pine, and lodgepole pine. Oregon, California, and Washington are the leading timber-producing states in the West. The South, with a warm, moist climate that promotes rapid forest growth, is the second-ranking lumbering region. It is primarily a producer of pines, particularly longleaf, shortleaf, loblolly, and slash pines. Lumber, pulpwood, and paper are the chief forest products of the South; Georgia is the leading producer. Most of the nation's hardwood production comes from a band of deciduous forests extending from Missouri and Arkansas eastward to the Atlantic. Mining Mining employs less than 1 per cent of the labor force and produces only about 3 per cent of the gross national product. It is, nevertheless, a vital activity, supplying the raw materials needed by many other industries. Despite abundant and varied production, the United States is totally or heavily dependent on imports for numerous minerals. Among them are mica, manganese, bauxite, cobalt, chromium, platinum, asbestos, tin, nickel, potassium, zinc, mercury, and tungsten. Petroleum and petroleum products are the largest and most costly of the nation's mineral imports. Fuels, primarily petroleum, natural gas, and coal, account for about 85 per cent of the value of all minerals produced. The chief oil-supplying states are Texas, Alaska, Louisiana, California, and Oklahoma. Natural gas comes mainly from Texas, Louisiana, Oklahoma, and New Mexico. Coal is the nation's most abundant fossil fuel, with estimated reserves sufficient to last for centuries. Kentucky, West Virginia, Wyoming, Pennsylvania, and Illinois are the leading producers of bituminous coal. Anthracite coal is mined in small amounts in Pennsylvania. Uranium, for nuclear reactors, is also mined, principally in New Mexico, Wyoming, and Texas. The chief metals mined in the United States, by value, include copper, gold, iron, magnesium, silver, zinc, lead, and molybdenum. In general, the greatest quantities of metallic minerals are mined in the southwestern and Rocky Mountain states. Iron ore comes mainly from Minnesota and Michigan. Bauxite, nickel, tin, and tungsten are also produced. Stone, sand, gravel, and other minerals used in building construction are produced in most states. Phosphate rock, used in making fertilizers and chemicals, is mined mostly in Florida and North Carolina. Sulfur and salt, which are also used in making chemicals, come mainly from the Gulf states. Large amounts of potash and other minerals are also produced. Energy Sources The United States depends to a great extent on fossil fuels for energy. Petroleum products alone account almost 40 per cent of all the energy consumed, natural gas for about 24 per cent, and coal for about 22 per cent. Petroleum is used chiefly to provide fuel for transportation and heating, while coal provides the bulk of the power for generating electricity. Natural gas is consumed mainly by households for heating and cooking and by industrial users. Hydroelectric, nuclear, geothermal, and solar power together provide about 26 per cent of the nation's energy. These energy sources are primarily used to generate electricity. Hydroelectric power is produced and used most extensively in the West and Pacific Northwest and in the Southeast. Nuclear power plants are scattered throughout the nation, but are most numerous east of the Mississippi. Solar and wind power are minor energy sources. Construction At the end of the 1990s the construction industry was the largest industry in the United States in terms of employment. Construction accounts for about 4 per cent of the gross domestic product. Since the end of World War II, a large increase in the nation's population and the expansion of suburbs and cities have generated much construction. In general, housing is the leading type of construction-usually between one and two million new dwelling units, mostly single-family homes, are built each year. Office buildings, retail buildings, factories, facilities for public utilities, and highways make up a large part of the nonresidential construction. Most construction is privately financed; generally less than one-fifth is publicly funded. Since the 1950s there has been an especially large increase in construction in the Sun Belt and in the West. California, Texas, and Florida usually lead the nation in new construction. Finance Commercial banks, savings and loan associations, credit unions, insurance and finance companies, and other financial institutions account for about one-seventh of the gross national product. The 50 largest commercial banks, many of them international in scope, hold roughly 40 per cent of the banking industry's total deposits. Most of the largest banks are in New York, California, Texas, and Illinois. New York City has long been the nation's principal financial center and home of its principal stock exchanges. Smaller stock exchanges are located in Boston, Philadelphia, Chicago, and San Francisco. Most financial institutions are regulated by the federal government, some by the states. The Federal Reserve System exercises certain central banking functions. Technological advances in communications and data processing have permitted financial institutions to expand their role in the economy greatly. For example, the bank credit card—whose widespread use was made possible by computerized billing and collection systems—has replaced the use of cash in many transactions. Transportation The United States has a vast system of railways, highways, and pipelines, and virtually every large city is served by a commercial airport. Inland waterways provide important transportation routes in many parts of the country. In the mid-1990's about 38 per cent of intercity freight shipments (in ton-miles) were by rail, 28 per cent by truck, 18 per cent by pipeline, 15 per cent by inland waterway, and less than 1 per cent by air. Passenger traffic (in passenger-miles) during the same period was handled primarily by automobiles—about 81 per cent according to government estimates. Airlines accounted for 17 per cent of the passenger-miles, railways and huses for the remainder. Highways In the mid-1990's there were about 3,905,000 miles (6,284,000 km) of roads, highways, and streets in the United States—the largest highway system in the world. Roughly four-fifths of the mileage is accounted for by roads and highways in rural areas, connecting cities and towns. Most of the roads are hard-surfaced. The best highways are those of the Interstate system, a national network of highspeed, limited-access superhighways linking the major cities. The system, begun in 1956. totals about 45,600 miles (73,200 km). In addition to the Interstate system there is a much larger network of federally aided state roads known as "US highways." Trade Retail and wholesale trade together account for about 17 per cent of the gross national product and about 21 per cent of the labor force. Retail trade is conducted, to a large extent, by corporate-owned chain stores. The leading types of retail establishments, by gross sales, are grocery stores, motor vehicle dealers, department stores, restaurants, and gasoline service stations. Discount stores, franchised fast-food shops, and manufacturers' outlets have had especially rapid growth during the past few decades. Since the 1960's suburban shopping centers and malls have substantially increased their share of the retail market. Wholesale trade is transacted mainly by wholesale merchants, manufacturers' sales agents, and brokers. The leading goods sold by wholesalers are processed foods and farm commodities, machinery, motor vehicles and equipment, petroleum products, and electrical goods. California, New York, Texas, and Illinois are the chief states in wholesale trade. Foreign Trade The United States leads all other countries in foreign trade, usually conducting about a seventh of the world's total (by value). In the early 1990's the nation's imports and exports amounted to a total of more than 885 billion dollars annually.