Mind-Blowing Facts About The US economy

The United States is home to the world’s strongest, most active economy.

To better understand the statistics that follow — they seriously might blow your mind to smithereens — let’s brush over a few basic terms that will be used throughout this article.

Economy

Although this term might seem too simple to need to recap, the definition of economy seems to slip many people’s minds.

An economy is a group of activities that spans across both the consumption and production sides of a city, state, region, nation, continent, or the world at large. Economies, through countless complex processes, patterns, procedures, and phenomena, determine the way resources are divvied out — or allocated — to people, businesses, government agencies, organizations, and groups.

Gross Domestic Product

Gross domestic product, most frequently referred to as the initialism GDP, refers to the dollar value of everything produced, both intangible services and definable goods, within a country in a year’s time. GDP isn’t the end-all, be-all of financial metrics, though it is used quite frequently.

Gross domestic product per capita is a variation of GDP that is used just as often as gross domestic product on its own.

Economic Recession

An economic recession, simply known as a recession, is a term used to describe a slump in a nation’s, region’s, or the world’s economy. Although the term is sometimes loosely used to classify a slump in economic activity that lasts at least a few months, Investopedia defines a recession as two back-to-back fiscal quarters’ worth of negative growth. The metric used to determine an economic recession is none other than the GDP of the nation in question.

Nominal and Real

The words nominal and real each have several definitions, almost all of which aren’t directly related to one another. However, when it comes to economics, people usually use nominal to refer to financial numbers that have not been adjusted to reflect market wide changes in time, population, or inflation. Economics-wise, real is typically employed as a means of expressing that numbers or metrics have, in fact, been adjusted according to seasonality or inflation, for example.

Unemployment Rate

Since our corporate overlords haven’t yet developed enough highly-advanced robots to take over our need to work, people around the world must put in countless hours at their workplaces to produce the goods and services that others buy. This is why hard work is so valued in all societies across the planet — without it, we wouldn’t have anything.

The unemployment rate, expressed as a percentage, is calculated by dividing the number of employed persons in a given area by the labor force, which is simply the total number of adults who are either employed or unemployed and looking for work.

In general, societies that are economically healthy have low unemployment rates. This means that there are plenty of employers around, each of which is receiving enough business to, in turn, put people to work manufacturing goods or rendering services.

Keep in mind that the unemployment rate usually isn’t an indicator of changes that are soon to come in a population, economy, or area. Rather, changes in a government’s, nation’s, or region’s unemployment rate come after market conditions have changed.

National Debt and Budget Deficits

While the term national debt can refer to any single country, this article is only using the jargon to refer to that of the United States.

The United States national debt is a measure of how much money the federal government owes the governments, individuals, businesses, and other entities that have lent it money, other financial instruments, goods, or services.

The national debt is different than the budget deficit, which are two terms that most Americans don’t seem to understand.

The United States federal government spends money on countless things, including the military, academic research, and infrastructure, for example. Whenever the government doles out more money than it receives in taxes in a year’s time, the United States is effectively running at a deficit. If the opposite were true, which would refer to a year in which the federal government brought in more money via taxes than it spent, it would be referred to as a budget surplus.

In summary, the national debt exists to pay off previous years’ budget deficits. Years in which the United States government operates at a surplus — which hasn’t happened since 2001, says the Congressional Budget Office — cause the national debt to shrink.

Without further ado, it’s time to dig into several amazing facts concerning the modern United States economy that you probably didn’t know about.

The National Debt Has Never Been Higher

As of Feb. 2019, the United States national debt climbed to a level higher than it’s ever been of roughly $22 trillion.

In general, governments only increase their national debts if they are able to benefit themselves and their constituents by doing so. Fortunately for we Americans, the majority of investments made by the federal government that has been funded by the national debt have been solid, to put it lightly.

According to the Congressional Budget Office, the country’s annual budget deficit is likely to average $1.25 trillion in each of the next few years.

Traditionally, budget deficits are the highest in years immediately following economic recessions. These deficits are essentially used to keep the country going forward in years when the economy simply couldn’t manage to do so. The Committee for a Responsible Federal Budget, a non-profit organization that is supported by American politicians on both sides of the aisle, suggests that the United States should begin cutting down on its average annual deficit.

California Is an Economic Powerhouse — But Just How Strong Is It?

California is, by far, the largest state in terms of population across the United States, as it’s home to more than 39 million residents. Combined with many miles of top-tier beaches facing the Pacific Ocean, the majority of the United States’ entertainment industry, the world’s leading tech companies, and countless other items of economic value, California has the strongest economy in the nation.

Believe it or not, if California were its own country, it would possess the world’s fifth-highest gross domestic product figure.

NAFTA Is Good for Auto Manufacturing

It might sound crazy, though the average automotive part used by American auto manufacturers crosses the borders of the United States, Mexico, or Canada a collective eight times before it’s finally installed for good on the assembly lines of Ford, GMC, Chevrolet, and others.

Complex parts, especially those that contain computer chips or other fine electronic components, are largely made in the United States. However, these parts’ not-so-fancy inputs are usually made outside of the country. Thanks to NAFTA, or the North American Free Trade Agreement, businesses in the auto manufacturing industry have been able to swap goods-in-progress relatively freely between one another.

As long as NAFTA will stay healthy, these car parts will continue to be distributed freely among North America’s three largest economic powers.

The United States Has Packed on Tons of Jobs

In every year since 2006, the United States economy hasn’t grown any more than 3% in one year’s time. Although this might lead you to believe that the economy hasn’t grown significantly over the past 15-odd years, this simply isn’t true.

It’s great for all our interests as Americans that the national economy hasn’t hit any super-fast growth streaks in the past 13 years. Why?

For every action in life — no matter what the subject or discipline at hand might concern — there will be an equal and opposite reaction. As such, it’s safe to assume that an economy that has experienced rapid growth in the past few years will experience a recession in the upcoming handful of years.

This Long-Running Period of Steady Growth Has Yielded Many New Jobs

In terms of real annual growth of gross domestic product over the last 13 years, the highest it’s come to 3% was last year — 2018 brought a real GDP growth rate of 2.9%.

This healthy period of rock-solid growth has, in turn, brought about 20 million jobs to the United States. Alongside these jobs sits a current unemployment rate of 3.8%.

Despite there being so many jobs right now, many workers across the United States have complained of having their hours cut, effectively dumbing full-time workers down to part-time capacities. Employers have found themselves being able to avoid major expenses related to government-mandated health insurance that must be paid on all full-time employees, for example. Although this has contributed to a nationwide increase in new jobs, workers certainly aren’t happy about taking the short end of the proverbial stick in this dichotomy.

The United States Economy Has Grown Consistently for How Long?

The United States economy has fared well for itself since the close of the Great Recession nearly a decade ago. Eight years of consistent, quarter-on-quarter growth came to fruition in May 2018, which marked the second-longest such streak in the country’s history.

All cycles do, by definition, swing back around, however. Some experts are predicting an economic recession to take hold in the United States by 2020.