The economy of the United States is the world's largest nominal economy. The U.S. economy maintains a very high level of output per person . Historically, the U.S. economy has maintained a stable overall GDP growth rate, a low unemployment rate, and high levels of research and capital investment. In 2006, consumer spending made up 70 percent of the United States Gross Domestic Product.
Since the 1960's, the United States economy absorbed savings from the rest of the world. The phenomenon is subject to discussion among economists.
The American labor market has attracted immigrants from all over the world and has one of the world's highest migration rates. Americans have the highest income per hour worked The country is one of the world's largest and most influential financial markets, home to major stock and commodities exchanges
The economic history of the United States has its roots in European settlements in the 16th, 17th, and 18th centuries. In 180 years the United States grew to a huge, integrated, industrialized economy that still makes up over a quarter of the world economy. The main causes were a large unified market, a supportive political-legal system, vast areas of highly productive farmlands, vast natural resources (especially timber, coal and oil), an entrepreneurial spirit, and at times a willingness to exploit labor.
For many years following the Great Depression of the 1930s, when the danger of recession appeared most serious, government sought to strengthen the economy by spending heavily itself or cutting taxes so that consumers would spend more, and by fostering rapid growth in the money supply. As a result, government leaders came to concentrate more on controlling inflation than on combating recession by limiting spending and tightening credit.
A central feature of the U.S. economy is the economic freedom afforded to the private sector by allowing the private sector to make the majority of economic decisions in determining the direction and scale of what the U.S. economy produces. This is enhanced by relatively low levels of regulation and government involvement, as well as a court system that generally protects property rights and enforces contracts. From its emergence as an independent nation, the United States has encouraged science and invention.
The United States is rich in mineral resources and fertile farm soil, and it is fortunate to have a moderate climate. It also has extensive coastlines on both the Atlantic and Pacific Oceans, as well as on the Gulf of Mexico. Rivers flow from far within the continent, and the Great Lakes—five large, inland lakes along the U.S. border with Canada—provide additional shipping access. These extensive waterways have helped shape the country's economic growth over the years and helped bind America's 50 individual states together in a single economic unit.
While consumers and producers make most decisions that mold the economy, government has a powerful effect on the U.S. economy in at least four areas, as the government uses a capitalist system. Strong government regulation in the U.S. economy started in the early 1900s the government promoted economic growth through protective tariffs and subsidies to industry, built infrastructure, and established banking policies, including the gold standard, to encourage savings and investment in productive enterprises.
The real median earnings of men who worked full time, year-round climbed between 2006 and 2007, from $43,460 to $45,113. For women, the corresponding increase was from $33,437 to $35,102. The median income per household member (including all working and non-working members above the age of 14) was $26,036 in 2006.
Agriculture is a major industry in the United States and the country is a net exporter of food. The United States controls almost half of world grain exports. Products include wheat, corn, other grains, fruits, vegetables, cotton; beef, pork, poultry, dairy products; forest products; fish.
The United States is the world's largest manufacturer. US main industries include petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber, and mining.
The United States is the world's largest trading nation. Since it is the world's leading importer, there are many U.S. dollars in circulation all around the planet. The dollar is also used as the standard unit of currency in international markets for commodities such as gold and petroleum (the latter sometimes calledpetrocurrency is the source of the term petrodollar).
The federal government attempts to use both monetary policy (control of the money supply through mechanisms such as changes in interest rates) and fiscal policy (taxes and spending) to maintain low inflation, high economic growth, and low unemployment. A relatively independent central bank, known as the Federal Reserve, was formed in 1913 to provide a stable currency and monetary policy. The U.S. dollarhas been regarded as one of the most stable currencies in the world and many nations back their own currency with U.S. dollar reserves. The U.S. federal government regulates private enterprise in numerous ways. Regulation falls into two general categories. Some efforts seek, either directly or indirectly, to control prices. Another form of economic regulation, antitrust law, seeks to strengthen market forces so that direct regulation is unnecessary. The government and, sometimes, private parties have used antitrust law to prohibit practices or mergers that would unduly limit competition.
Since the 1970s, government has also exercised control over private companies to achieve social goals, such as improving the public's health and safety or maintaining a healthy environment.
Taxation in the United States is a complex system which may involve payment to at least four different levels of government and many methods of taxation. United Statestaxation includes local government, possibly including one or more of municipal, township, district and county governments. It also includes regional entities such as school and utility, and transit districts as well as including state and federal government. The National Bureau of Economic Research has concluded that the combined federal, state, and local government average marginal tax rate for most workers to be about 40% of income.
Each level of government provides many direct services. The federal government, for example, is responsible for national defense, backs research that often leads to the development of new products, conducts space exploration, and runs numerous programs designed to help workers develop workplace skills and find jobs (including higher education). Government spending has a significant effect on local and regional economies—and even on the overall pace of economic activity.
State governments, meanwhile, are responsible for the construction and maintenance of most highways. State, county, or city governments play the leading role in financing and operating public schools. Local governments are primarily responsible for police and fire protection
Overall, federal, state, and local spending accounted for almost 28% of gross domestic product in 1998.