United States: Economic and Political Overview
For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
The United States is the world's largest economy, ahead of China. After a decade of growth, the country’s GDP growth rate turned negative in the aftermath of the COVID-19 pandemic, exacerbated by rising inequalities and obsolete infrastructure. However, the economy recovered promptly, GDP growth rebouncing to an estimated 5.7% in 2021, driven by strong private consumption and investment and supported by highly accommodative monetary and fiscal policies. As tighter financial conditions negatively impacted demand, GDP growth slowed down to 1.6% in 2022, and is expected to further reduce to 1% in 2023 and 1.2% in 2024 (IMF).
Concerning public finances, the fiscal measures implemented to contain the effects of the COVID-19-induced crisis weighed heavily on the government budget, resulting in a deficit of -9.5% of GDP in 2021 (IMF). Despite some additional spending planned in the new infrastructure bill, the deficit decreased to -4% GDP in 2022, thanks to the phasing out of pandemic-related measures and resumed economic activity. The tightening of monetary policy is expected to contain the growth of general government fiscal deficit to -5.3% GDP in 2023 and -6% GDP in 2024 (IMF). The government’s debt-to-GDP ratio, already on an upward trend in recent years, increased consistently to finance spending conceded to support households and businesses, reaching 134.5% in 2020 (IMF). Fiscal tightening helped decreasing the debt burden to 122.1% GDP in 2022, and the IMF forecasts it to pick up to 122.9% GDP in 2023 and 126% GDP in 2024. The U.S., however, enjoys unmatched financing flexibility, being the issuer of the US dollar, the world's main reserve currency. Inflation rose sharply to reach 8.1% in 2022, amid high energy prices, persistent supply-chain disruptions, and labor shortages (IMF). The war in Ukraine exacerbated price increases for energy and food. The IMF forecasts inflation to move back towards the FED target of 2% (3.5% in 2023 and 2.2% in 2024), amid the relaxation of supply chain constraints and an adjustment in global energy prices. The 2023 budget focuses on deficit reduction, health, manufacturing, includes climate initiatives and allocates USD 44.9 billion for aid to Ukraine.
The first impact of the COVID-19 crisis was incredibly heavy on the U.S. labour market, with the unemployment rate skyrocketing to 8.1% in 2020 (IMF). The labour market, however, recovered quickly with unemployment falling to 3.7% in 2022 (IMF). However, due to the slowing economy, the IMF sees an increase in unemployment, with a forecast rate of 4.6% in 2023 and 5.4% in 2024. American citizens enjoy one of the highest GDP (PPP) per capita in the world, estimated at more than USD 75,000 in 2022 by the IMF. Nevertheless, inequalities are still significant, as they tend to be worsened by current public health policies (with rising numbers of people without health insurance). In 2021, the povery rate was 11.6%, with 37.9 million people in poverty, a level similar to 2020 (U.S. Census – latest data available).
| Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
| GDP (billions USD) | 21,060.45 | 23,315.08 | 25,464.48 | 26,854.60 | 27,741.12 |
| GDP (Constant Prices, Annual % Change) | -2.8 | 5.9 | 2.1 | 1.6 | 1.1 |
| GDP per Capita (USD) | 63,577 | 70,160 | 76,348 | 80,035 | 82,132 |
| General Government Balance (in % of GDP) | -10.7 | -10.7 | -5.9 | -6.6 | -6.7 |
| General Government Gross Debt (in % of GDP) | 133.5 | 126.4 | 121.7 | 122.2 | 125.8 |
| Inflation Rate (%) | 1.3 | 4.7 | 8.0 | 4.5 | 2.3 |
| Unemployment Rate (% of the Labour Force) | 8.1 | 5.4 | 3.6 | 3.8 | 4.9 |
| Current Account (billions USD) | -619.70 | -846.35 | -925.56 | -728.79 | -689.93 |
| Current Account (in % of GDP) | -2.9 | -3.6 | -3.6 | -2.7 | -2.5 |
Source: IMF – World Economic Outlook Database, October 2021
The United States is a highly industrialised country with high levels of productivity and the use of modern technologies. Key sectors include agriculture (corn, soy, beef, and cotton); manufacturing of machinery, chemical products, food, and automobiles; and a booming tertiary market focused on finance, new technologies, insurance, real estate, rentals, and leases. The American agricultural sector is without doubt one of the world's largest, with California alone producing more than one-third of the country's vegetables and two-thirds of its fruits and nuts. Nevertheless, agriculture only accounts for 1% of GDP and employs 1% of the workforce (World Bank, latest data available). According to the latest data from the U.S. Department of Agriculture, keeping into consideration also food and related industries, the primary sector contributed USD 1.264 trillion to the U.S. GDP in 2021, a 5.4% share (the output of America’s farms alone contributed USD 164.7 billion). In 2021, 21.1 million full- and part-time jobs were related to the agricultural and food sectors - 10.5% of total U.S. employment. In the most recent survey, there were 2.02 million U.S. farms in 2020, for a total of 897 million acres of land (USDA).
Including a broad range of activities, the industrial sector contributes to 17.9% of GDP and employs 20% of the workforce (World Bank). Besides the industries mentioned above, the country is also the world leader in the aerospace and pharmaceutical industries. Thanks to its abundant natural resources, the United States has become a leader in the production of a number of minerals and has been able to maintain diversified production. The country is the world's largest producer of liquid natural gas, aluminium, electricity and nuclear energy. It is the world's third-largest oil producer and, for several years, has also been developing shale gas extraction on a large scale. The manufacturing sector alone accounts for 12% of the country’s value-added (U.S. Department of Commerce). As per data from the Bureau of Economic Analysis, private goods-producing industries decreased 10.4% in Q2 2022.
The American economy is essentially based on services: the tertiary sector accounts for more than three-fourths of GDP (77.6%) and employs 79% of the country's workforce (World Bank). A large portion of GDP is composed of finance, insurance, real estate, rental, and leasing sector (20.1% in Q3 2022); as well as professional and business services (13.1%). The governmental sector (at federal, state and local levels) accounts for around 11.6% of the country’s GDP; while the share of educational services, healthcare and social assistance reaches 8.4%, ahead of wholesale (6.3%) and retail sales (5.7% - U.S. Bureau of Economic Analysis). The latest figures from the Bureau of Economic Analysis show that U.S. private services-producing industries’ contribution to GDP increased 2% over Q2 2022. Within private services-producing industries, the leading contributors to the increase were health care and social assistance; professional, scientific, and technical services; real estate and rental and leasing; and accommodation and food services. Partly offsetting these increases was a decrease in wholesale trade.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 1.4 | 19.9 | 78.7 |
| Value Added (in % of GDP) | 1.0 | 17.9 | 77.6 |
| Value Added (Annual % Change) | -19.5 | 3.3 | 6.6 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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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, labour 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.}}
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
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.
Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025
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Latest Update: November 2023
