Development and structure of the US economy

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:54

The most influential and richest country in the world will determine the situation in global markets for a long time to come, despite the fact that China is gradually pushing it. In the structure of the US economy, about 80% falls on the service sector, this is the most advanced post-industrial state. In many industries, American companies are at the forefront of technological advances and lead the global market.

About country

The United States of America - a state located in North America, has an area of 9.5 million km, ranking 4th in this indicator. The country is home to 327 million people (3rd place in the world), of which whites - 72.4%, blacks - 12.6%, Asians - 4.8%, people with ancestors belonging to 2 or more races, - 6.2%, representatives of indigenous peoples - 0.2%. The most widely spoken language, which is actually considered official, is English, which is considered native by about 80% of the population. The second most common is Spanish (about 13%). GDP per capita in 2017 was $61,053.67.

The political structure is a constitutional federal republic. The supreme body is: executive power - the president; legislature - the bicameral US Congress, the judiciary - the Supreme Court. State powers are divided between the federal government and the states. An advanced post-industrial power of the world, since the leading sphere in the structure of the US economy is services. In 2017, the country's GDP grew by 2.2%.

General information

The world's largest economy, in almost all macroeconomic indicators for more than a hundred years continues to lead only in nominal GDP - 19284.99 billion dollars. Nevertheless, the American economy produces almost a quarter of the planet's GDP. In terms of GDP calculated at purchasing power parity, the United States was ahead of China in 2014. The US economy in the world according to this indicator occupies 15% of the world. China is forecast to overtake the US this year in terms of domestic market size as well.

However, to the question of what kind of economy the US has, for a long time the main answer will be: the most advanced. The country has the highest technological potential. Since the end of World War II, many American companies have dominated the global market, especially in digital technology, pharmaceuticals, medical, aerospace, and military equipment. What is a significant advantage of the US economy. The countryhas the most diversified national economy.

At the same time, the United States also has the world's largest public external debt, which in 2016 amounted to $17.91 trillion. Other long-term concerns for the country include:

• stagnating wages for low-income families;
• low investment in deteriorating infrastructure;
• rapidly rising medical and pension costs for an aging population;
• Sizable current account and significant budget deficit.

The rise of the American economy

The origins of the country's development lie in search of a better life by European settlers since the 16th century. The history of the US economy began with a small colonial economy, which gradually transformed into an independent farming economy and then into an industrial economy. At first, Americans lived mostly on small farms and led a relatively independent economic lifestyle. As the territories reclaimed from the indigenous population grew, trade and handicraft ancillary production developed.

By the 18th century, the New World had become a fairly developed rich colony with an economy based on shipbuilding and navigation, agricultural production (cotton, rice, tobacco) using slave labor. After independence, the government pursued a policy of supporting industry through the introduction of protective tariffs on imports and open subsidies. Betweenfree trade was carried out by individual states, specialization was gradually determined with the division into the industrial North and the agrarian South.

At the beginning of the 19th century, the industrial revolution took place in the country, which gave a strong impetus to the growth of the US economy, which was facilitated by the emergence of the shipping company, which accelerated cargo transportation. But the construction of railways had a special impact on the development of the country, which opened up significant inland territories for development.

From the Civil War to the Present

The victory of the industrial north in the Civil War (1861-1865) had a decisive influence on the features of the US economy. The slave system was abolished, freeing up the vast labor resources necessary for the developing industry. The economy of the North, which grew on military orders, continued to grow rapidly, and the southern plantations became less profitable. Subsequently, this period, when many discoveries and inventions led to qualitative changes in the manufacturing sector, was called the second industrial revolution. The telephone, electricity, freezing railway cars, then the car and the plane entered daily life then. The first American oil was produced in western Pennsylvania.

After the First World War, the United States came out on top in terms of economic growth and produced almost half of the industrial output of the world. However, starting in 1929, the Great Depression began in the country, an economic crisis that ended only with the beginning ofWorld War II, when the development of the US economy began to stimulate military orders.

In the second half of the twentieth century, the American economy, despite repeated short-term periods of recession, successfully developed, becoming the largest in the world. Economic policy as a whole was aimed at ensuring high employment, maintaining low interest rates and inflation. The sectoral structure of the US economy has also changed dramatically, high-tech enterprises began to occupy an increasing share, the service sector has greatly increased, especially in the financial sector.

In 2007-2009, the country experienced a mortgage crisis, which became the longest and deepest crisis since the Great Depression. The economy fell 4.7% during this period and took six years to recover.

US GDP structure

The developed post-industrial American state focuses primarily on expanding the service sector. The material production of the country (mining and manufacturing, agriculture, forestry and fishing industry, construction) occupies only 20% in the structure of the US economy, including 19% attributable to high-tech industry and 1% to developed agriculture. Despite its small footprint, American agriculture leads the world in many products.

The main part in the structure of the US economy is formed in the service sector, primarily finance, education, government services, he alth care, science, trade, various modes of transport and communications. ATIn the coming decades, professional and personal services will become increasingly important, and their share in the industry will grow rapidly as well.

Trends in the structure of the US economy

For a long time, the United States has been among the world leaders in industrial development. However, in the 1980s, the country was one of the first to begin to transition to a post-industrial society, and the industrial sector began to decline significantly. At the same time, industry remains the key industry, which largely ensures the high technological level of other sectors. It is in this sector that the latest technological innovations primarily accumulate.

The sectoral structure of the US economy began to change due to two main reasons: due to the transfer of American enterprises to less developed countries and increased competition from regions with cheaper labor. Under President Donald Trump, the US government is seeking to re-increase the number of manufacturing companies with protective tariffs, forcing US and foreign companies to locate/relocate production in the country. Also in the American economy there was a decrease in the share of agriculture and primary industries (possibly with the exception of oil and gas).

Rank in the world in terms of the share of the service sector

The share of the service sector in the economy is one of the indicators characterizing the level of economic development. Although the leaders in this indicator are small states,with virtually no industry - Monaco (95.1%), Luxembourg (86%) and Djibouti (81.9%).

In terms of the share of the service sector in the structure of the economy, the United States overtook the Netherlands and Israel, which had certain competitive advantages and specialized in services. Among the developed countries, the United States is in first place in terms of the size of the tertiary sector and, in addition, has the most optimal GDP structure. Especially important is the leading role of the country in the financial sector and high-tech industries related to the development and implementation of innovations. For example, in terms of the volume of financial instruments sold on the New York Stock Exchange and NASDAQ (which specializes in shares of high-tech companies), the United States is far ahead of other financial centers in the world. The investment climate of the country makes it possible to perceive new achievements of science well, the country is the world leader in the export of licenses for inventions, the latest developments and discoveries.

Industry

Industrial production in the United States in 2017 grew by 2.3% (122nd in the world). The country's share in the world economy is steadily declining, but it still remains among the leaders in the production and export of industrial products. However, the structure of the US economy by industry has undergone significant changes in recent decades. The country has a highly diversified industry, being the world leader in high technology and the second largest industrial output.

A feature of the US economy in the industrial sector is that most ofproduced GDP does not provide basic industries (engineering and metallurgy), but science-intensive production, consumer goods, textile and food industries. The military-industrial complex of the country is the largest producer and exporter of arms in the world, occupying 34% of the global market. The country leads in the field of production in many types of products, including steel, automotive, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, mining.

Energy & Oil & Gas

Last year, for the first time in twenty years, the country came out on top in the world in oil production, overtaking Saudi Arabia and Russia, which was largely due to the shale revolution. The main hydrocarbon producing regions are Texas, Alaska, California, and the continental shelf of the Gulf of Mexico. Most of the drilling rigs are located on the coast. Explored oil reserves are estimated at more than 19.1 billion barrels.

Up to 40% of the total energy required in production is provided by hydrocarbons. The country uses about 20 million barrels of oil per day, of which 66% is for transportation, 25% for industry, 6% for heating, and approximately 3% is burned to generate electricity. Other energy sources are natural gas, coal and nuclear power. In recent decades, the number of coal-fired thermal power plants has been significantly reduced,2016 - by 400 units. Three of the four largest coal mining companies went bankrupt in 2015 due to lower demand for coal. The share generated by renewable energy sources is increasing every year, now they account for 2.6% of total consumption. In total, the country's energy sector generates 4.4 million gigawatt-hours of electricity (second place after China).

Agriculture

Despite a small share in the structure of the US economy, the country's agriculture produces 9.2% of the country's exports. According to this indicator, the state ranks first in the world, and in terms of production volumes, the industry is in third place after China and Russia. The United States produces the most soybeans and is the third largest in the production of sugar beets, and is in 9th place in the collection of cane, rice - in 11th. In America, grain is grown in the amount of 16% of world production, most of which goes to feed livestock. A feature of the country's agriculture is the predominance of animal husbandry.

The industry is distinguished by a high degree of technical equipment and labor productivity, a wide variety of products. In recent decades, the process of concentration of production has intensified, the number of farms has decreased from 4 to 2 million, while the volumes have grown.