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flag United States United States: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

The United States is the most powerful economy in the world. Nevertheless, it was the first to suffer the consequences of the financial crisis in 2009, during which it experienced the worst recession since the crisis of the 1930s. Economic recovery began in 2010 thanks to the Government’s large-scale budget and monetary stimulus plan, which stimulated household consumption among other positive results. However, the pace of the recovery has struggled to accelerate since then. The overall GDP growth rate in 2014 was 2.2%, demonstrating the resilience of the American economy, but it followed an erratic path: it declined by 2.9% in the first trimester due to a cold spell, but rebounded in the second and third trimesters, rising at a rate of 4.6% and 3.9% respectively.

President Obama won a clear second-term majority in the 2012 elections, pledging to counter inequality and to defend the middle class. But, his party did not fare as well in the mid-term elections of 2014, which saw the Republicans take over the Senate and consolidate their control in the House of Representatives. The Republicans, for their part, pledged to concentrate on economic growth and cut public spending (except on national defence). The divided Government between a Democratic President and a Republican Congress foreshadows an intense debates over the Federal budget.

Since the financial crisis, regulation and supervision of financial markets have been on the agenda. Another challenge facing the U.S. involves an ageing population, resulting in rising healthcare costs. The Obama administration is also focusing on combatting corporate tax evasion, announcing in September 2014 various measures to close tax loopholes. The most prominent of these loopholes is “corporate inversion,” whereby companies establish their headquarters abroad to avoid paying American taxes, even as they continue to operate in the U.S.

The global financial crisis provoked a significant increase in unemployment. On the plus side, in 2014, official figures show that 230,000 new jobs were created on average and that the unemployment rate decreased to 6.1%. On the other hand, this masks a decline in the labour force participation rate. When one takes into consideration discouraged workers who have quit the labour market and those forced to accept part-time positions, the real unemployment rate climbs to 11.5% (compared to 8-10% before the crisis). Moreover, wages have not been rising at pre-crisis levels. In addition, inequalities of wealth and income have been increasing since the 1980s, currently reaching their highest levels in the past century. In the last trimester of 2014, declines in oil prices increased the purchasing power of American consumers, but the growing strength of the dollar is penalising exporters.

Following the crisis of 2009, the Fed supplied large sums of liquidity into the economy every month. Since mid-2013, it has sought to reduce these amounts without weakening the recovery. At the same time, the Fed is keeping interest rates low. It is not expected to raise the rates before late 2015. While these low rates push domestic consumption, there is a risk they could create a credit bubble, spurring panic in the market when they start to rise.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 15,517.9316,163.1516,768.0517,416.2518,286.69
GDP (Constant Prices, Annual % Change) 1.62.32.22.23.1
GDP per Capita (USD) 49,74651,450e53e54,67857,045
General Government Balance (in % of GDP) -7.8-6.3-4.8-4.0e-3.3
General Government Gross Debt (in % of GDP) 99.0102.5104.2105.6e105.1
Inflation Rate (%) 3.12.11.5e2.0e2.1
Unemployment Rate (% of the Labor Force) 8.98.17.46.35.9
Current Account (billions USD) -459.35-460.75-400.26-430.94-483.58
Current Account (in % of GDP) -3.0-2.9-2.4-2.5-2.6

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The American agricultural sector is without a doubt the biggest in the world. It is characterized by high productivity and by the use of modern technologies. The United States is one of the major producers of corn, soy, beef and cotton. California alone produces more than 12% of the country's total agricultural production. Nevertheless, agriculture only accounts for 1% of the American GNP.

The United States is a highly industrialized country. The industrial sector contributes to almost one-fourth of the GDP and includes a large variety of activities. The most significant are the manufacturing of electric and electronic machinery, chemical products, industrial machinery, the food industry and automobile sectors. It is also the world leader in aerospace and pharmaceutical industries. The abundance of natural resources has turned the United States into a leader in the production of several minerals and allows it to maintain a diversified production. It is thus the largest world producer of liquid natural gas, aluminum, electricity and nuclear energy. It is the third largest oil producer in the world and, after having extracted it for several years, the shale gas has also been developed on a large scale.

The American economy is essentially based on services. The tertiary sector accounts for more than three-fourths of the GDP and of the country's workforce.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.6 16.7 81.2
Value Added (in % of GDP) 1.3 21.0 77.7
Value Added (Annual % Change) 0.3 3.8 2.2

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
American Dollar (USD) - Average Annual Exchange Rate For 1 EUR 1.391.321.391.291.32

Source: CIA - The world factbook - Last Available Data.

 
 

Learn more about Market Analyses about the United States on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
75.5/100
Position:
Mostly Free
World Rank:
12/178
Regional Rank:
2/3

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
8.25
World Rank:
7/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

In general, the country has reduced its trade barriers and it coordinates the world economic system. The United States is convinced that trade promotes economic growth, social stability, and democracy in each individual country and also helps to promotes better international relations. Nevertheless, trade represents less than 30% of the country’s GDP. The United States is the world's largest importer and second largest exporter of goods and the largest importer and exporter of commercial services. As part of the 2010 economic stimulus plan, the administration adopted a policy of promoting exports, with the aim of doubling exports in the next five years.

The U.S. trade balance is structurally very negative. As an effect of the economic crisis, the reduction in imports also reduced the deficit; however, with the economic recovery the deficit grew larger in 2011. In 2013, the trade deficit was partially reabsorbed due to a slight revival in exports and a decrease in energy expenses. In 2013, imports decreased from the first time since 2009

The main trade partners of the United States are the countries of NAFTA (North American Free Trade Agreement composed of the United States, Mexico and Canada), China and the European Union. Since July 2013, the United States started the negotiations to sign a free-trade agreement with the European Union.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 1,605,3001,969,1842,265,8942,335,5372,331,367
Exports of Goods (million USD) 1,056,0401,278,2631,480,4321,545,7101,578,972
Imports of Services (million USD) 334,310374,894400,561416,813427,260
Exports of Services (million USD) 475,979540,587597,925630,284662,111
Imports of Goods and Services (Annual % Change) -13.712.75.52.31.1
Exports of Goods and Services (Annual % Change) -8.811.96.93.33.0
Imports of Goods and Services (in % of GDP) 13.815.817.317.116.5
Exports of Goods and Services (in % of GDP) 11.012.413.613.613.5
Trade Balance (million USD) -509,696-648,678-740,644-742,093-701,667
Trade Balance (Including Service) (million USD) -383,778-494,659-548,629-537,598-476,391
Foreign Trade (in % of GDP) 24.828.230.930.730.0

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
Canada 19.0%
Mexico 14.3%
China 7.7%
Japan 4.1%
United Kingdom 3.0%
See More Countries 51.8%
Main Suppliers
(% of Imports)
2013
China 19.8%
Canada 14.5%
Mexico 12.2%
Japan 6.1%
Germany 5.0%
See More Countries 42.5%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 7.1%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.6%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 2.7%
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 2.2%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 2.0%
See More Products 82.3%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 12.0%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 6.7%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 4.0%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 3.8%
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 2.6%
See More Products 70.9%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

- bn USD of services exported in 2011
36.04%
33.59%
8.67%
7.03%
7.02%
5.84%
1.40%
0.41%
-%
-%
-%
- bn USD of services imported in 2011
20.08%
19.91%
18.22%
13.19%
8.53%
8.01%
5.72%
3.78%
1.88%
0.56%
0.13%

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Federal Trade Commission, US customs, Department of State
US Department of Labor
US Department of Agriculture
International Trade Administration
Statistical Office
US Census Bureau
Central Bank
The Federal Reserve
Stock Exchange
New York Stock Exchange- Euronext
American Stock Exchange
Philadelphia Stock Exchange
Chicago Stock Exchange
Chicago Mercantile Exchange
Chicago Board Options Exchange
Minneapolis Grain Exchange
Kansas City Board of Trade
NASDAQ
Search Engines
About
Ah-ha.com
Altavista
Aol Netfind
Ask Jeeves
Dogpile
Excite
Galaxy
Go.com
Google
Help Find it
Hotbot
Infospace
Looksmart
Lycos
Mamma
Bing
Northern Light
Open Directory Project
Scrub The Web
Search.com
Search King
Searchport
Seekon
Web Crawler
Yahoo!
Economic Portals
National Bureau of Economic Research
Bureau of census
Bureau of Labor Statistics
Bureau of Economic Analysis
Economic Statistics

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Political Outline

Executive Power
President is both the chief of state and the head of the government. President is elected by an electoral college (who are elected directly from each state) to serve a four-year term. President is the commander-in-chief of the armed forces.
These powers are checked by parliament. The Cabinet is appointed by the President subject to approval by the senate.
Legislative Power
The legislature is bicameral in the United States. The Congress consists of Senate (the upper house) and the House of Representatives (lower house). The Senate has the power to confirm or reject presidential appointments and to ratify treaties; the House of Representatives has the sole right to initiate revenue bills, although they may be amended or rejected by the Senate. President has the power to veto the legislation passed by the Congress. The Congress can override the veto with a two-thirds vote.
Main Political Parties
Two political parties dominate politics:
- The Democratic Party: socially progressive, favours government intervention to temper the market economy
- The Republican Party (also known as the Grand Old Party, GOP): socially conservative, supports free-market capitalism and emphasizes national defence
Current Political Leaders
President: Barack Obama (since January 2009): Democrat Party
Next Election Dates
Presidential: November 2016
Congress: November 2014
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
46/180
Evolution:
14 places down compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
1/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: January 2015