The United States boasts a highly advanced and developed mixed economy. It holds the title of the world’s largest economy by nominal GDP and ranks second, after China, in terms of purchasing power parity (PPP). In 2024, it stood as the sixth highest in per capita GDP (nominal) and eighth in per capita GDP (PPP). In 2023, the U.S. economy represented 26% of the global economy in nominal terms and about 15.5% in PPP terms. The U.S. dollar is the predominant currency for international transactions and serves as the world’s reserve currency, supported by a vast U.S. Treasuries market, its role in the petrodollar system, and the linked eurodollar. Various countries either use the U.S. dollar as their official currency or adopt it as a de facto currency. Since World War II, the U.S. economy has experienced consistent growth, low unemployment and inflation rates, and significant technological advancements.
High productivity, a well-developed transportation infrastructure, and abundant natural resources fuel the American economy. The U.S. ranks sixth among OECD countries in terms of average household and employee income and had the highest median household income in 2021. However, it also exhibits one of the highest levels of income inequality among developed nations. Major U.S. trading partners include Canada, Mexico, China, Japan, Germany, South Korea, the United Kingdom, Taiwan, India, and Vietnam. The U.S. is the largest importer globally and the second largest exporter. It has established free trade agreements with countries such as Canada, Mexico (through the USMCA), Australia, South Korea, Israel, and several others.
The U.S. labor market is known for its flexibility, characterized by a hire-and-fire approach, resulting in relatively low job security. Among OECD countries, the U.S. maintains an efficient social security system, with social expenditure accounting for about 30% of GDP.
By 1890, the United States had surpassed the British Empire as the world’s most productive economy. Today, it is the largest producer of petroleum and natural gas. In 2016, the U.S. was the world’s largest trading nation and the second-largest manufacturer, with American manufacturing contributing a fifth of the global total. The U.S. not only has the largest internal market for goods but also dominates the services trade. In 2018, total U.S. trade amounted to $4.2 trillion. Of the world’s 500 largest companies, 121 are headquartered in the U.S., which also has the highest number of billionaires with a combined wealth of $3.0 trillion. In December 2022, U.S. commercial banks held assets totaling $22.9 trillion, and global assets under management in the U.S. exceeded $30 trillion.
The U.S. economy faced a significant downturn during the Great Recession of 2008. However, the American Reinvestment and Recovery Act, passed by Congress, helped the U.S. achieve the longest economic expansion on record by July 2019.
The New York Stock Exchange and Nasdaq are the world’s largest stock exchanges by market capitalization and trade volume. The U.S. holds the world’s largest gold reserve, with over 8,000 tonnes. In 2014, the U.S. was ranked first in venture capital and global research and development funding. The country spends around 3.46% of its GDP on research and development. The U.S. has produced the most Nobel laureates in economics and is the fourth largest high-technology exporter. It ranks second globally in the number of patent applications. Consumer spending made up 68% of the U.S. economy in 2022, and the labor share of income was 44% in 2021. The U.S. has the largest consumer market worldwide. Its labor market attracts immigrants globally, with one of the highest net migration rates in the world. The U.S. consistently performs well in studies like the Ease of Doing Business Index and the Global Competitiveness Report.
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