Economic Outline

Economic Indicators

The United States is the world's largest economy ahead of China. The country recovered well from the COVID-19-induced crisis, with GDP rebounding by 6.1% in 2021, followed by 2.5% in 2022 (IMF). According to estimates by the Bureau of Economic Analysis, in 2024, real GDP grew by 2.8% in 2024, slightly down from 2.9% in 2023. The 2024 growth was driven by higher consumer spending, investment, government spending, and exports, while imports also rose. More specifically, consumer spending rose due to gains in services and goods. Healthcare, particularly hospital and outpatient services, led service growth; whereas recreational goods and vehicles, driven by information processing equipment and motor vehicles, boosted goods spending. Government spending increased at both state and federal levels. State and local growth were driven by employee compensation, while federal growth was led by defence expenditures (data Bureau of Economic Analysis). According to the IMF, the rate of economic activity is anticipated to remain relatively stable in 2025, at 2.7%, slowing to 2.1% the following year.

Concerning public finances, in fiscal year 2024 (which ended on September 30), the federal budget deficit rose to USD 1.8 trillion, up USD 138 billion (8%) from 2023, equaling 6.4% of GDP (above the 50-year average of 3.8%). Revenues increased 11% (USD 479 billion), driven by higher individual income taxes, while outlays rose 10% (USD 617 billion), led by education (USD 309 billion). Interest payments on public debt grew 34% to USD 949 billion. Federal debt reached 97.8% of GDP, up from 96% in 2023 (data Congressional Budget Office). The CBO forecasted a USD 1.87 trillion federal budget deficit for fiscal year 2025, with a further decrease in 2026 (USD 1.71 trillion), hitting USD 2.7 trillion in 2035. As per the IMF, persistent high deficits and interest expenses have led to a rise in general government debt, which was estimated at 121% of GDP in 2024. Early 2025 data by the U.S. Bureau of Labor Statistics show that inflation increased 2.9% over the 12 months ending in December. The core index (excluding food and energy) rose 3.2%, while the energy index fell 0.5%. The food index grew by 2.5% over the same period. Easing inflation prompted the Fed to lower its federal funds rate by 0.25% to 4.25%-4.5% in January 2025, in order to balance employment and price stability. The IMF forecasts an inflation rate of 1.9% in 2025, followed by an average of 2.1% in the two following years.

Hiring has eased following significant U.S. central bank rate hikes in 2022 and 2023. However, the economy remained strong due to a resilient labor market, characterized by historically low layoffs and wage-driven consumer spending. The IMF estimated an unemployment rate of 4.1% at the end of 2024, with an expected increase to 4.4% this year. Overall, American citizens enjoy one of the highest GDPs (PPP) per capita in the world, estimated at more than USD 89,680 in 2025 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 2023, the poverty rate was 11.1%, with 36.8 million people in poverty, a level similar to the previous year (U.S. Census – latest data available).

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