United States flag United States: Economic and Political Overview

The economic context of the United States

Economic Indicators

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, with GDP growth rebounding to an estimated 5.7% in 2021 and 2.1% in 2022. In 2023, the U.S. economy sustained robust expansion despite significant monetary policy tightening since early 2022. A tight labour market, along with improving employment and participation rates, contributed to solid real income growth. Despite elevated inflation, consumer demand remained strong. Residential investment declined due to high mortgage rates dampening housing demand. However, government industrial policies and support for re-shoring boosted non-residential construction investment, particularly in green energy and semiconductor sectors. For the year as a whole, the IMF estimated growth at 2.1%. According to the IMF, the rate of economic activity is anticipated to decelerate in 2024 and 2025 (at 1.5% and 1.8%, respectively), gradually adjusting to tight financial conditions and high credit costs.

Concerning public finances, the headline deficit of the general government stood at 6.5% of GDP in 2022 but rose sharply to 8.8% in 2023 due to a decline in revenues, primarily from lower capital gains tax receipts and dividends paid by the Fed, alongside increased interest expenses. While there's a slight anticipated reduction in the deficit for 2024-2025, it's estimated to remain elevated at 7.6% of GDP, under current policies. Persistent high deficits and interest expenses have led to a rise in general government debt, which, after a decrease from its 2020 peak, climbed from 121.3% of GDP in 2022 to 123.3% in 2023 and is expected to further increase to 130.3% by 2025. Consumer price inflation experienced a steady downward trend since 2022-Q2, despite increases in oil prices. Headline inflation was forecasted to moderate further in the subsequent quarters, aided by decreasing housing price inflation, which reflected past trends in house prices. Inflation in labour-intensive service sectors might have been slower to decline if wage growth had remained elevated. However, tight monetary conditions and a softening labour market were poised to facilitate further disinflation over the forecast horizon. After reaching 4.1% in 2023, consumer price inflation was expected to moderate to 2.8% in 2024 and to 2.4%, nearing the Fed target, in 2025 (IMF).

In 2023, the labour market cooled only gradually with employment continuing to increase, albeit at a slowing pace. The unemployment rate was stable at 3.6% but is projected to increase to 3.8% in 2024. Despite the anticipated rebound in activity, unemployment should remain stable in 2025 (at 3.9% - IMF). American citizens enjoy one of the highest GDP (PPP) per capita in the world, estimated at more than USD 80,412 in 2023 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 2022, the poverty rate was 11.5%, with 37.9 million people in poverty, a level similar to 2021 (U.S. Census – latest data available).

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 25,744.1027,357.8328,781.0829,839.6831,018.77
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 77,19281,63285,37387,97890,903
General Government Balance (in % of GDP) -6.8-8.6-6.7-7.1-6.5
General Government Gross Debt (in % of GDP) 120.0122.1123.3126.6128.9
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) -971.59-812.75-732.65-758.35-763.23
Current Account (in % of GDP) -3.8-3.0-2.5-2.5-2.5

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

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 2% of the workforce (World Bank, latest data available). According to 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. Figures from the U.S.D.A. show that, in 2023, grain corn production reached a historic high of 15.3 billion bushels, marking a 12% increase from the previous year's estimate. Rice production for the same year totalled 218 million cwt, showing a notable surge of 36% compared to 2022. Conversely, all cotton production was estimated to stand at 12.4 million 480-pound bales, reflecting a 14% decrease from the previous year.

Including a broad range of activities, the industrial sector contributes to 17.9% of GDP and employs 19% 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 several minerals and has been able to maintain diversified production. The country is the world's largest producer of liquified 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. In terms of value-added, the U.S. is the second-largest manufacturing nation in the world behind China. The manufacturing sector alone accounts for 11.4% of the country’s value-added; however, when including direct and indirect (i.e., purchases from other industries) value-added, manufacturing contributes an estimated 24% of GDP (U.S. Department of Commerce). According to figures from the Federal Reserve, industrial production decreased at a 3.1% rate in Q4/2023 after increasing at a 1.8% pace in the previous quarter.

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 (20.7% in Q3 2023); as well as professional and business services (12.9%). The governmental sector (at federal, state and local levels) accounts for around 11.3% of the country’s GDP; while the share of educational services, healthcare and social assistance reaches 8.6%, ahead of retail sales (6.4%) and wholesale (5.9% - U.S. Bureau of Economic Analysis). The latest figures from the Bureau of Economic Analysis show that U.S. private services-producing industries’ value-added increased by 1% over Q2 2023. The rise was primarily driven by expansions in utilities and professional, scientific, and technical services. However, these gains were partially counterbalanced by declines in various sectors, notably wholesale trade and accommodation and food services.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.7 19.2 79.2
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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Indicator of Economic Freedom


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.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


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.

World Rank:

Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025


Country Risk

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Latest Update: July 2024