25 Astonishing Facts About the US Economy That Most People Don’t Know
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The United States boasts the biggest economy in the world. Many factors have contributed to its growth, development, and evolution. Economies tend to fluctuate and ebb and flow with the changing political and international environment. It takes a robust economy to withstand all these fluctuations to remain the biggest economy. The US also continues to make significant economic moves that empower it and enable it to grow economically and evolve with the changing circumstances. Here are 25 astonishing facts about the US economy that most people don’t know:
The US has the Largest Global GDP
25 Astonishing Facts About the US Economy That Most People Don’t Know
While many may know that the US has the largest economy in the world, it may be surprising to learn that the country is also one of the largest contributors to the global GDP. The US has made all the right economic moves over time, making it the largest contributor to the GDP at just under $29 trillion. China is the second largest contributor to the global GDP at $18.5 trillion.
Consumer Spending is the Highest Contributor to the GDP
About 70% of US GDP comes from consumer spending, one of the country’s biggest drivers of economic growth. US consumers’ spending habits in terms of their monthly expenses have enabled the country to reach its status of being the biggest economy and are likely to continue contributing to the country’s economic growth in the future.
The US Economy is Highly Diversified
Many successful global economies have a particular sector or industry that has been the center of the country’s economic strength. However, this is not the case in the US. The US economy is highly diversified, with key sectors like technology, finance, healthcare, and agriculture significantly contributing to its economic strength. As the US continues to promote the growth of these critical sectors through increased investments and policies that support their growth, the national economy is projected to continue to grow and expand.
The US is the Largest Exporter of Services
As the leading exporter of services in the world, the US economy has grown significantly over time. The US sold services worth about $929 billion in 2022 alone, enabling the country to capture 13% of the entire market share. These services include finance, insurance, intellectual property, etc., which are always in high demand worldwide. This export has enabled the country to develop an economy transcending global borders, with contributions from selling services to other countries worldwide.
The US Has One of the Most Productive Workforces
Many may not realize they play a big role in building a strong economy. The US has a large workforce and is also one of the most productive globally, contributing to a significant output per hour worked. Labor productivity can play a big role in ensuring that the country’s economy continues to run steadily with a large output of goods and services that can contribute to the economy.
The Gig Economy has Grown
There is a changing dynamic in how people work in the country, which is reflected in the country’s gig economy growth. Over 30% of workers in the country partake in the gig economy, displaying the increasing autonomy people want over their work. The Freelance Forward report shows that freelancers contributed $1.35 trillion to the US economy in annual earnings in 2022, up $50 billion from 2021.
The US National Debt has Reached $35 Trillion
The US national debt is the debt the federal government owes to Treasury security holders. It has accumulated in recent years and reached a whopping $35 trillion. This raises questions and debates about the country’s fiscal policies and sustainability. The rising national debt can lead to several concerns in the national economy, including the possibility of an increase in taxes to account for the rising national debt, which may affect the country’s residents.
The Minimum Wage in the Country Varies in Each State
The minimum federal wage in the US stands at $7.25 per hour, which may not be considered very high. However, not all states follow the minimum wage set by the federal government. Some states and cities have higher minimum wages for employees, reflecting the local economy’s condition. This demonstrates that although the entire economy in the country is regarded as robust, the economies in the states and cities can vary, where one city’s economy may be stronger than the next.
The Tech Sector Contributes Significantly
The tech sector is central to development and advancement through new solutions, services, and products that increase efficiency and productivity. This sector is one of the growing sectors in the country that is making significant contributions to the city’s economic growth. Major tech companies like Apple, Amazon, and Google lead the tech sector into solid growth, eventually reflecting the economy’s growth.
Agriculture Contributes Over $1 Trillion
The agricultural sector and all its related industries contributed approximately $1.530 trillion to the country’s GDP in 2023 alone. As one of the largest producers of various crops, such as corn, soybeans, and wheat, the country has significantly benefited from its production and exports to other countries.
The US has the Largest Foreign Direct Investment (FDI)
In the first quarter of 2024, the US had the most significant foreign direct investment, with $76 billion worth of investments, which was higher than any other country worldwide. The attraction of FDI into the country signals confidence that other countries see in its economy and its potential to see higher growth in the future, leading to significant investment returns. Some of the highest FDI in the country comes from countries like Japan, the UK, and Canada.
The US Does Not Have the Highest Homeownership Rate
The US does not have the highest homeownership rate in the world, with countries like Albania, Laos, and Kazakhstan all having a rate of over 95%. The current homeownership rate in the US stands at 65.6% after continued fluctuations mainly influenced by economic conditions and policies affecting a resident’s ability to buy a home. The higher the homeownership rate, the stronger the economy can become, benefiting the country.
Americans With Higher Education Levels Have Higher Incomes
A higher education level in the country often correlates with a higher income, where college graduates are seen to earn significantly more over their lifetimes. In 2023, bachelor’s degree holders aged 22–27 earned a median of $60,000 per year, while high school graduates of the same age earned a median of $36,000 per year. Education can play an essential role in the country’s GDP growth.
The US Leads in Innovation
The US is a leader in innovation thanks to its significant investments in research and development. The growth of this sector can lead to all kinds of innovative solutions and discoveries that can impact the world. The country’s growing research and development sector also demonstrates its role in helping the economy grow, as it can attract more foreign direct investments and present employment opportunities.
Many Cities are Experiencing Fast Growth
Cities like Austin and Phoenix are experiencing some of the fastest growth in the country owing to the economic opportunities in these cities, their comparable affordability, and the lifestyles they offer. The growth encompasses economic and population growth, which can benefit the cities and the entire country in the long run. These cities also have many growing sectors and are emerging as tech hubs, increasing the potential for higher investments into these cities from foreign sources.
The US Has One of the Highest Levels of Income Inequality
The US is highly ranked for its income inequality among the many developed countries worldwide. This inequality is seen in terms of gender and race inequality, which can be extremely damaging to several members of the population. Excessive inequality can harm social cohesion and can lower economic growth, which will impact the entire country and its population.
The US Has the Largest Stock Exchange
The US is home to the largest stock market exchange based in New York City by market capitalization. The New York Stock Exchange (NYSE) is the largest stock exchange with over $30 trillion market capitalization. It has remained the largest since World War I, demonstrating its robust nature. The strong stock market in the country and the rising stock prices can potentially increase sales and earnings for corporations, which can positively reflect the country’s GDP growth over time.
Household Debt is Rising
Household debt in the US has risen sharply in recent years because of the increase in debt driven by mortgages, student loans, credit card debt, automotive loans, etc. As of Q2 2024, the total household debt in the United States is $17.80 trillion, with an average debt of $104,215 per household. This is a record high and has increased by $3.7 trillion since the end of 2019. The rising amount of debt can lead to several concerns in the entire economy because it may decrease consumer spending, which can lower economic growth.
The US Boasts a Vibrant Startup Culture
The US has a vibrant startup culture that opens many opportunities for entrepreneurs. The supportive policies and initiatives all over the country that promote entrepreneurship have enabled many local economies to grow and improve over time with the success that startups and emerging businesses find. This, in turn, has positively contributed to the country’s economic growth. The supportive entrepreneurial environment in the country has led to the emergence of some of the most successful companies that began as small businesses.
The US Has a Complex Tax Code
The US has one of the most complex tax codes in the world, with thousands of pages of regulations that residents are expected to follow. While taxes are essential for the smooth functioning of an economy and a country, the complexity of the American tax code can be difficult for residents to navigate, which may lead them to make economic decisions that affect not only their financial situation but the whole nation’s economy in the long run.
E-commerce Has Transformed Consumer Behavior
The e-commerce industry in the US has grown significantly in recent years, leading to an evolution in consumer behavior and patterns. This evolution has also affected the retail industry, leading to a total transformation in the buying and selling goods. The rise of e-commerce in the country has also influenced valuing, product accessibility, transportation marking, etc., opening up a whole new area where continued economic growth can occur.
The US Energy Sector Impacts Global Markets
The energy sector in the US is an essential source of employment for residents, contributing to the strength of the country’s economy. The country has also begun energy exports in recent years, which have significantly contributed to the country’s economic growth. As a large producer and exporter of natural gas, the country’s energy exports have reached new highs in 2023. These exports have had a positive impact on the country but have also impacted global energy markets
The Labor Force Participation Rate has Declined
The labor force participation rate in the country has seen a steady decline in recent years, particularly among specific demographics of the population. As of September 2024, the labor force participation rate stands at 62.7%, lower than many other countries. This low rate can affect economic growth as more people in the country are currently unemployed for various reasons, whether because of the pursuit of higher education, institutionalization, etc.
The Federal Reserve Plays an Important Role
The US Federal Reserve is critical in managing the country’s economy. It determines the country’s monetary policies, influences interest rates, decides on inflation rates, and more, all of which play crucial roles in the stability and strength of an economy. The Federal Reserve regulates the entire financial system in the country, and all the decisions made by it can determine the future of the country’s economic condition.
The US Has Many Billionaires
The number of billionaires in the US alone has exceeded over 700 individuals nationwide. This has increased mainly because of their stock market gains or the success they see in the tech sector. However, this may not be very beneficial for the country’s economy as it can lead to extreme wealth gaps and an increase in inequality and poverty, which can diminish the strength of a country’s economy.
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