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Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

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, which are slowing down potential GDP growth. However, output contraction in 2020 was less severe than other large advanced economies and the country recovered quickly from the shock, returning to pre-pandemic GDP levels in Q2/2021 already. The American Rescue Plan underpinned private consumption, contributing to overall GDP growth of 6% over the year, despite supply-side bottlenecks and the ongoing pandemic dragging partially the economic activity. The current account deficit widened in the last couple of years but is projected to remain steady in terms of GDP over the forecast horizon. Investment and household consumption are projected to be the main growth drivers in 2022, with the IMF forecasting a robust GDP growth of 5.2% before slowing to 2.2% in 2023.

Concerning public finances, the fiscal measures implemented to contain the effects of the COVID-19-induced crisis weighed heavily on the government budget, resulting in a deficit of 8.8% of GDP in 2021. Despite some additional spending planned in the new infrastructure bill, the deficit is expected to gradually decrease to 8.3% in 2022 and then again to 7.1% in 2023 (IMF), also thanks to the phasing out of pandemic-related measures and resumed economic activity. The government’s debt-to-GDP ratio, already on an upward trend in recent years, increased consistently to finance spending conceded to support households and businesses, reaching 133.3% in 2021 (from a pre-pandemic level of 108.5%). The U.S., however, enjoys unmatched financing flexibility, being the issuer of the US dollar, the world's main reserve currency. The IMF forecasts the debt burden to decline to 130.7% this year before picking up marginally in 2023 (131.1%). Headline inflation rose sharply over 2021 jumping to 4.3% amid strong base effects, high energy prices, and supply constraints. Although there are signs of wage pressure in several market segments, inflation is expected to move back towards the FED target of 2% over the forecast horizon (to 2.7% in 2023 following a rate of 3.5% this year), amid the relaxation of supply chain constraints and an adjustment in global energy prices.

The first impact of the COVID-19 crisis was incredibly heavy on the U.S. labour market, with the unemployment rate skyrocketing to 8.1% in 2020. The labour market, however, recovered quickly with unemployment falling to 5.4% at the end of 2021. Jobs growth has slowed sharply towards the end of the year, but average working hours have increased. The IMF sees a further reduction in unemployment, with a forecast rate of 3.5% in 2022 and 3% in 2023. American citizens enjoy one of the highest GDP (PPP) per capita in the world, estimated at USD 68,309 in 2021 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 2020, there were 37.2 million people in poverty, approximately 3.3 million more than one year earlier (U.S. Census – latest data available).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 21,372.6020,893.75e22,939.5824,796.0825,938.16
GDP (Constant Prices, Annual % Change) 2.3-3.4e5.64.02.6
GDP per Capita (USD) 65,052e63,35869,37574,72577,881
General Government Balance (in % of GDP) -6.1-10.7-8.8-8.3-7.1
General Government Gross Debt (in % of GDP) 108.5133.9e133.3130.7131.1
Inflation Rate (%) 1.81.2e4.33.52.7
Unemployment Rate (% of the Labour Force) 3.78.15.43.53.0
Current Account (billions USD) -472.15-616.10-796.12-867.97-854.07
Current Account (in % of GDP) -2.2-2.9-3.5-3.5-3.3

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Country Risk

See the country risk analysis provided by La Coface.

 

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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 0.9% of GDP and employs 1.3% of the workforce (World Bank, latest data available). According to the latest data from the U.S. Department of Agriculture, keeping into consideration also food and related industries, the primary sector contributed USD 1.109 trillion to the U.S. GDP in 2019, a 5.2% share (the output of America’s farms alone contributed USD 136.1 billion). In 2020, 19.7 million full- and part-time jobs were related to the agricultural and food sectors - 10.3% of total U.S. employment. In the most recent survey, there were 2.02 million U.S. farms in 2020, for a total of 897 million acres of land (USDA).

Including a broad range of activities, the industrial sector contributes over 18.2% of GDP and employs 19.9% of the workforce. 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 a number of minerals and has been able to maintain diversified production. The country is the world's largest producer of liquid 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. The manufacturing sector alone accounts for 10.9% of the country’s value-added. As per data from the Bureau of Economic Analysis, private goods-producing industries decreased 2.5% in Q3/2021; nevertheless, production at U.S. factories increased to its highest level in nearly three years in November.

The American economy is essentially based on services: the tertiary sector accounts for more than three-fourths of GDP (77.3%) and employs over 78.7% of the country's workforce. A big portion of GDP is composed of finance, insurance, real estate, rental, and leasing sector (22.3% in 2020); as well as professional and business services (12.8%). The governmental sector (at federal, state and local levels) accounted for around 12.6% of the country’s GDP in 2020; while the share of educational services, healthcare and social assistance has been growing to 8.6%, ahead of wholesale (5.8%) and retail sales (5.7% - U.S. Department of Commerce). The latest figures from the Bureau of Economic Analysis show that U.S. selected services total revenue for the third quarter of 2021 was USD 4,520.8 billion, an increase of 3.6% from the second quarter of 2021 and up 15.1% from the third quarter of 2020.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.4 19.9 78.7
Value Added (in % of GDP) 0.9 18.2 77.3
Value Added (Annual % Change) 5.4 2.3 2.2

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

The U.S. is the world's largest importer and second-largest exporter of goods, as well as the largest importer and exporter of commercial services. Nevertheless, trade represents only 23.4% of the country’s GDP in 2020 (World Bank). U.S. top exports in 2020 were refined petroleum oils followed by cars, electronic integrated circuits, petroleum gases, and automotive parts and accessories. Main U.S. imports in the same year included cars, automatic data processing machines, phone system devices, medicaments, crude oils, and automobile parts. The U.S. signed 14 reciprocal free trade agreements, 5 preferential trade programs, 51 trade and investment framework agreements, and 48 bilateral investment treaties.

The country's main trading partners in 2020 were Canada (17.8%), Mexico (14.9%), China (8.7%), Japan (4.5%), the United Kingdom (4.1%) and Germany (4%); whereas imports came chiefly from China (19%), Mexico (13.7%), Canada (11.5%), Japan (5.1%) and Germany (4.9% - data by Comtrade). Historically, the U.S. has taken the view that trade promotes economic growth, social stability, democracy and better international relations. However, in recent years the trend had reversed, with the insurgence of several trade disputes (particularly with China, accused of unfair trade practices). Trade relations between the U.S. and China finally started to normalize towards the end of Trump’s presidency, with the two countries signing the U.S.–China Phase One trade deal in Washington. Nevertheless, trade relations did not improve much during Biden’s presidency.

The U.S. trade balance is structurally negative and the trade deficit has further widened in recent years: in 2020 it stood at an estimated 3.1% of GDP (World Bank). In the same year, exports of goods decreased to USD 1,431 billion, down by 12.8% year-on-year; with imports declining at a slower pace (-6.2% - at USD 2,407 billion). Despite being a net importer of goods, the U.S. are a net exporter of services: in 2020, services exports totalled USD 684 billion (-19.8% y-o-y) against USD 435.7 billion of imports (-23.2% y-o-y, data WTO). The latest figures from the U.S. Bureau of Economic Analysis shows that in the first ten months of 2021 the goods and services deficit increased by USD 161.7 billion (+29.7%) from the same period one year earlier. Exports increased by USD 315.1 billion or 17.9%, imports rose by USD 476.8 billion or 20.7%.

 
Foreign Trade Values 20162017201820192020
Imports of Goods (million USD) 2,251,3512,408,4762,614,2212,567,4452,407,527
Exports of Goods (million USD) 1,454,6071,546,2731,663,9821,643,1611,431,610
Imports of Services (million USD) 503,053520,424540,951567,121435,748
Exports of Services (million USD) 752,411778,361839,594853,842684,001

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20162017201820192020
Foreign Trade (in % of GDP) 26.527.227.526.323.4
Trade Balance (million USD) -749,801-799,340-880,302-864,332-915,573
Trade Balance (Including Service) (million USD) -481,172-513,785-579,939-576,865-681,707
Imports of Goods and Services (Annual % Change) 1.54.44.11.2-8.9
Exports of Goods and Services (Annual % Change) 0.44.12.8-0.1-13.6
Imports of Goods and Services (in % of GDP) 14.615.015.214.513.3
Exports of Goods and Services (in % of GDP) 11.912.212.311.810.1

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20212022 (e)2023 (e)2024 (e)2025 (e)
Volume of exports of goods and services (Annual % change) 5.48.24.43.63.5
Volume of imports of goods and services (Annual % change) 14.18.74.12.12.0

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
The United States is a member of the following international economic organisations: G-7, G-10, G-20, Asia-Pacific Economic Cooperation (APEC), WTO, IMF, OECD, ICC, among others. For the full list of economic and other international organisations in which participates the United States click here. International organisation membership of the United States is also outlined here.
Free Trade Agreements
The up-to-date list of Free Trade Agreements signed by the United States can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2020
Canada 17.8%
Mexico 14.9%
China 8.7%
Japan 4.5%
United Kingdom 4.1%
See More Countries 50.0%
Main Suppliers
(% of Imports)
2020
China 19.0%
Mexico 13.7%
Canada 11.5%
Japan 5.1%
Germany 4.9%
See More Countries 45.9%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Joe Biden (assumed office 20 January 2021) - Democratic Party
Vice President: Kamala Harris (assumed office 20 January 2021) - Democratic Party
Next Election Dates
Presidential: November 2024
Senate: 8 November 2022
House of Representatives: 8 November 2022
Current Political Context

2021 started with a mob of pro-Trump demonstrators assaulting the U.S. Capitol in an effort to stop lawmakers from certifying the results of the 2020 presidential election, which saw the victory of Democrats’ candidate Joe Biden. The elected president was sworn in as the 46th president of the United States at the end of January together with the first female vice-president, Kamala Harris. Much of the political scene was dominated by the fight against and the recovery from the Covid-19 pandemic, as well as by the withdrawal of U.S. army from Afghanistan at the end of August, which favoured the takeover of the Taliban terrorist group. Right after, Australia’s decision (amid the so-called “Aukus” pact between Australia, the UK and the U.S.) to cancel a multi-billion dollar deal to buy French submarines, preferring American military hardware instead, resulted in a diplomatic crisis with Paris.
The Democrats Party has been losing popularity and performed poorly in the November 2021 off-year election. Mid-term elections are scheduled for November 2022: the Republicans’ control in either congressional chamber would pose a risk to the already fragile scope for Biden to pass his legislative agenda.

Main Political Parties
Two political parties dominate politics:
- The Democratic Party: socially progressive, favours government intervention to temper the market economy
- The Republican Party (also known as the Grand Old Party, GOP): socially conservative, supports free-market capitalism and emphasises national defence.
There are other parties such as the Reform Party, the Libertarian Party, the Green Party, the Constitution Party, the Natural Law Party, the Party for Socialism and Liberation, the Working Class Party, and the Working Families Party.
Executive Power
The President is the Chief of State, Commander-in-Chief of the Armed Forces and the Head of Government. The President is elected by an electoral college (whose members are elected directly from each state) to serve a four-year term. These powers are checked by the U.S. Congress. The Cabinet is appointed by the President and subject to approval by the Senate.
Legislative Power
The legislature is bicameral in the United States. The Congress consists of the Senate (the upper house) and the House of Representatives (lower house). The Senate has the power to confirm or reject presidential appointments and to ratify treaties. It is composed of 100 senators. The House of Representatives has the sole right to initiate revenue bills, although they may be amended or rejected by the Senate. It is composed of 435 members. The President has the power to veto the legislation passed by the Congress, but the Congress can override the veto with a two-thirds vote.
 

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COVID-19 Country Response

COVID-19 epidemic evolution
The U.S. is a federal system that grants extensive autonomy to each of the 50 states. For that reason there is no single nationwide policy related to the coronavirus pandemic. To find data about the latest status of the COVID-19 pandemic evolution in the United States, please visit the Center for Disease Control “Cases in U.S.” with the official federal data. The website coronavirus.gov serves as a portal for U.S. government resources for COVID-19. However some of the official federal data is not accurate and each of the 50 states keeps different records. It is therefore advisable to also consult the New York Times “Coronavirus in the U.S.: Latest Map and Case Count” page and the Johns Hopkins University Coronavirus Resource Center, each of which has U.S.-specific data as well as worldwide data collected from many sources. For specific states and cities is it advisable to consult their individual websites.
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country
Sanitary measures
To find out about public health suggestions and the suggested sanitary measures in the United States, please consult the U.S. government’s Center for Disease Control Cornonavirus website (in English, Spanish, Chinese Korean and Vietnamese). The website includes the up-to-date information on the containment suggestions put in place by the federal government and public health recommendations. As each of the 50 states and, in some cases, only specific counties or cities, has its own rules, it is advisable to consult local state, county or city websites for localised information. The CDC provides a list of State & Territorial Health Department Websites. The website Coronavirus.gov also offers information about sanitary measures, while USA.gov provides a list of the most important U.S. government websites for COVID-19 information.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
The U.S. government has enacted temporary COVID-19 related trade measures which aim to restrict exports of vital medical supplies and to liberalize imports of vital medical supplies, as well as other essential products. For the updated information on the introduced trade import and export restrictions and other trade measures (ex. tariffs reductions) due to COVID-19 pandemic, please consult the section dedicated to the U.S. on International Trade Centre's COVID-19 Temporary Trade Measures webpage.

For further information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), you can also consult Customs and Border Control’s website which publishes information on import and export measures in vigour in its Trade Announcements and Advisories. Customs and Border Control also offers a complete resource for all imports and exports during the crisis at COVID-19 Relief Imports How can we help.
Economic recovery plan
For information on the economic recovery scheme put in place by the U.S. government to address the impact of the COVID-19 pandemic on the U.S. economy, please visit the website of the U.S. Department of the Treasury. There is information about the U.S. economic emergency plan, known as the Cares Act on the department’s website.
For a general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the U.S. government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to the United States in the IMF’s Policy Tracker platform.
Support plan for businesses
For information on the local business support scheme established by the US government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, please consult the Coronavirus.gov's section on "Supporting Small Businesses",  “Assistance for Small Businesses“ section of the Treasury Department’s website.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document. You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters
EXIM Bank's website "Coronavirus Response" lists all support measures the EXIM bank is providing to exporters. Furthermore, the U.S. Department of Commerce’s International Trade Administration temporarily reduced or eliminated the costs of several of their export services in an effort to support U.S. businesses affected by COVID-19.
 

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