United States Economic Outlook
Economic powerhouse:
The United States has a diverse, highly developed and private-sector-led economy, which is the largest in the world in nominal GDP terms and is characterized by high levels of productivity, technological innovation, and competitiveness. Other key economic strengths include a flexible labor market, relatively solid demographics compared to other rich nations, and the use of the dollar—the world's reserve currency. U.S. economic data is strong: In the decade to 2023, the United States boasted real GDP growth of 2.3%, well above the G7 average of 1.8%. However, the U.S. also has its weaknesses. Income inequality is the highest among its peers, politics and society at large are bitterly polarized, and the fiscal position is weak.
A bustling business environment:The country boasts many of the world's largest and most successful corporations. The technology sector, centered in places like Silicon Valley, has played a pivotal role in driving innovation and global competitiveness. In recent decades, the United States has seen a shift towards a service-based economy, benefitting from a vast domestic consumer base. Services, such as finance, healthcare, education, and entertainment, now account for a substantial portion of GDP and employment.
Trade hub:International trade is a cornerstone of the U.S. economy, with the nation being both a major importer and exporter of goods and services. That said, trade policy has turned more protectionist in recent years, with the country pulling out of talks to join the CPTPP trade agreement and locked in a trade and technology war with China.
Increasing government intervention:Under President Biden, the country has implemented a more state-led approach to economic management that focuses on boosting domestic manufacturing and ensuring the security of supply chains. Initiatives have included green-energy subsidies and tax breaks, fiscal incentives for semiconductor production, and domestic content requirements for government procurement.
Challenges:Income inequality, volatile politics and a mounting fiscal burden remain economic drags. Additionally, despite its active role in trade, the U.S. has maintained a trade deficit for several decades. Moreover, climate change, healthcare costs, and the aging population pose long-term economic concerns.
U.S. economic outlook:When looking at the United States' economic forecasts, our analysts expect the nation's outperformance relative to other major economies to continue over our forecast horizon. Economic diversification provides stability and resilience, helping the economy weather challenges such as economic downturns and global crises.
The United States' Macroeconomic Analysis:
Nominal GDP of USD 25,744 billion in 2022.
Nominal GDP of USD 27,721 billion in 2023.
GDP per capita of USD 82,715 compared to the global average of USD 10,589.
GDP per capita of USD 77,187 compared to the global average of USD 10,589.
Average real GDP growth of 2.3% over the last decade.
Average real GDP growth of 2.4% over the last decade.
Sector Analysis
In 2020, services accounted for 81% of overall GDP, manufacturing 11%, other industrial activity 7%, and agriculture 1%. Looking at GDP by expenditure, private consumption accounted for 67% of GDP in 2020, government consumption 15%, fixed investment 21%, and net exports -3%.International trade
In 2021, manufactured products made up 58% of total merchandise exports, mineral fuels 16%, food 11%, ores and metals 4% and agricultural raw materials 2%, with other categories accounting for 9% of the total. In the same period, manufactured products made up 77% of total merchandise imports, mineral fuels 8%, food 7%, ores and metals 3% and agricultural raw materials 1%, with other goods accounting for 4% of the total. Total exports were worth USD 2,090 billion in 2022, while total imports were USD 3,273 billion.Main Economic Indicators
Economic growthThe United States saw robust GDP growth from 2013 to 2019, driven by strong consumer spending and technological innovation. However, growth was disrupted by the COVID-19 pandemic in 2020, leading to a sharp but brief recession. The subsequent recovery in 2021-2023 was rapid, fueled by strong growth in consumption and exports. To read more about GDP growth in the U.S., go to our dedicated page.
Fiscal policy
The United States experienced significant fiscal shifts over the last decade. Early in the decade, efforts were made to reduce the post-financial crisis deficit, achieving some success. However, major tax cuts in 2017 under Trump reversed this trend, widening the deficit. The COVID-19 pandemic in 2020 led to unprecedented fiscal stimulus, further enlarging the budget shortfall. President Biden has not made tackling the deficit a priority, and in 2023 the U.S. had the second-largest fiscal deficit in the G7. Find out more on our dedicated page.
Unemployment
Over the last decade, the United States' unemployment rate reflected its economic cycles. Post-Global-Financial-Crisis, the rate steadily decreased, reaching a 50-year low by 2019. However, the COVID-19 pandemic caused a dramatic spike in 2020, with unprecedented job losses. Rapid fiscal and monetary responses facilitated a swift recovery, and by 2022, unemployment rates had significantly decreased, returning close to pre-pandemic levels. For more information on USunemployment click here.
Inflation
The United States experienced low and stable inflation for 2014-2020, averaging around 2%. However, in 2021-2023, inflation rates surged, driven by supply chain issues, stimulus spending, and increased consumer demand. This sudden spike posed challenges for monetary policy, highlighting the delicate balance between economic stimulus and inflation control in unprecedented economic conditions. Go to our USinflation page for extra insight. Go to our United States inflation page for extra insight.
Monetary Policy
The US Federal Reserve's policy rates over the last decade saw a cycle of hiking, lowering, and hiking again. Post-financial crisis, rates were kept near zero until 2015, when the Fed started gradual hikes as the economy improved. However, in response to the COVID-19 pandemic, rates were quickly cut back to near zero in 2020. By 2022, in the face of rising inflation, the Fed initiated a series of rate hikes, marking a significant shift towards tighter monetary policy. See our USmonetary policy page for additional details. See our United States monetary policy page for additional details.
Exchange Rate
The US Dollar maintained its position as the key global reserve currency over the last decade. Post-pandemic the Dollar gained strength, benefiting from the US's relatively robust economic recovery and higher interest rates compared to other major economies. For more info on the U.S. dollar, click here.
Economic situation in The United States
The U.S. was the G7’s top-performing economy in Q3, a trend which has been a near-constant since 2023. Robust private consumption, government spending, and exports of goods and services buoyed economic activity in the third quarter. Our Consensus is for GDP growth to remain solid in Q4, underpinned by consumer spending. This is in line with retail sales beating market expectations in October and November, as well as stronger-than-expected employment growth in November. In politics, Donald Trump recently threatened 25% tariffs on all Canadian and Mexican imports plus an extra 10% tariff on Chinese imports unless these nations address his concerns over drug trafficking and immigration. These tariff hikes may not actually be implemented; the threat could be a coercive tactic. However, they still highlight the protectionist and transactional trade agenda of the next administration.United States Economic Forecasts
Projections out to 2034.59 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 73 expert analysts.
Want to get insight on the economic outlook for United States in the coming years? FocusEconomics collects projections out to 2034 on 59 economic indicators for United States from a panel of 73 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the United States economy. To download a sample report on the United States' economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
United States Economic Indicators
Frequently Asked Question about United States's Economy
Why is the U.S. economy so strong?
What are the U.S.' key economic weaknesses?
Will China's economy overtake the U.S. economy?
Primarily due to institutional stability, abundant natural resources, a culture of innovation, and a highly skilled workforce. The U.S. dollar's role as the world's reserve currency also attracts global investment and facilitates government borrowing. Furthermore, the U.S. has highly developed and flexible financial markets, world-leading technology companies, and top-tier universities.
Yawning income inequality risks social and economic instability. Moreover, growing public debt could limit fiscal options. Additionally, the U.S. has aging infrastructure—hence the USD 1 trillion infrastructure bill approved in 2021. Healthcare is costly and inefficient, and there is a mismatch between workers' skills and those demanded by employers.
Our analysts expect China's economy to become larger than the U.S. economy in nominal GDP terms in the 2030s, though China's economy is already the largest when adjusting for the cost of living. However, there are multiple downside risks to China's economy which could stop it from overtaking the U.S.