Economic overview: The US has the most powerful, diverse, and technologically advanced economy in the world, with a per capita GDP of $27,500, the largest among major industrial nations. In this market-oriented economy, private individuals and business firms make most of the decisions, and government purchases of goods and services are made predominantly in the marketplace. US business firms enjoy considerably greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, lay off surplus workers, and develop new products. At the same time, they face higher barriers to entry in their rivals' home markets than the barriers to entry of foreign firms in US markets. In all economic sectors, US firms are at or near the forefront in technological advances, especially in computers, medical equipment, and aerospace, although their advantage has steadily narrowed since the end of World War II. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and professional/technical skills of those at the top and, more and more, fail to get pay raises, health insurance coverage, and other benefits. The years 1994-95 witnessed moderate gains in real output, low inflation rates, and a drop in unemployment below 6%. The capture of both houses of Congress by the Republicans in the elections of 8 November 1994 has intensified the debate over how the US should address its major economic problems. These problems include inadequate investment in economic infrastructure, rapidly rising medical costs of an aging population, sizable budget and trade deficits, and stagnation of family income in the lower economic groups. The outlook for 1996 is for continued moderate growth, low inflation, and about the same level of unemployment.
GDP: purchasing power parity - $7.2477 trillion (1995 est.)
GDP real growth rate: 2.1% (1995 est.)
GDP per capita: $27,500 (1995 est.)
GDP composition by sector: agriculture: 2% industry: 23% services: 75% (1995 est.)
Inflation rate (consumer prices): 2.5% (1995)
Labor force: 132.304 million (includes unemployed) (1995) by occupation: managerial and professional 28.3%, technical, sales and administrative support 30.0%, services 13.5%, manufacturing, mining, transportation, and crafts 25.3%, farming, forestry, and fishing 2.8%
Unemployment rate: 5.6% (December 1995)
Budget:
revenues: $1.258 trillion
expenditures: $1.461 trillion, including capital expenditures of $NA
(1994)
Industries: leading industrial power in the world, highly
diversified and technologically advanced; petroleum, steel, motor
vehicles, aerospace, telecommunications, chemicals, electronics,
food processing, consumer goods, lumber, mining