WHAT MAKES THE US ECONOMY TICK?
After the 2008 Great Recession, the United States is progressing. But what really drives the American economy? Let’s take a look at the following industries.
The sector managed to surpass the recession and recovered, thanks to technological advances, low farm employment, and investment in agricultural infrastructure. Greater exports and global demand for agricultural products have bolstered the industry.
In 2014, the Commerce Department said US exports closed another record for the fifth consecutive year, reaching $2.35 trillion. Agricultural exports surged to a record of $152.5 billion from the preceding year’s $141 billion. And for the last five years, exports have scaled 41% in value.
Some 16.9 million jobs, including those on farms, as well as areas of forestry and fishing, were brought by this sector in 2013, accounting for 9.2% of total US employment. Speaking of employment, agriculture-related industries supported an additional 15.6 million jobs.
Amidst the slumping oil prices worldwide, the United States is in the middle of an energy era. Oil and gas production has increased drastically due to progressions in drilling and hydraulic fracturing of shale formations. As a matter of fact, the industry grew 168% between 2010 and 2013.
Having said that, America outmatched both Saudi Arabia and Russia as the world’s leading oil producer, and surpassed the latter as the world’s top natural gas producer. The country has more wind energy powering its grid, unlike its counterparts, and is also making a name in solar power technology.
One reason for the nation’s recovery is the explosion in shale oil production, which lead to economic and wage growth. In 2012, the industry added 2.1 million new jobs. However, it has affected consumers’ budget, with the average household disposable income escalating by $1,200. As of present, the US invests $200 billion in oil and gas.
The industry recorded a 135% three-year growth rate and gained $21.8 billion, attributing it to aging population and higher incidence of chronic illness. Being one of the country’s fastest growing sectors, healthcare spending as a percentage of the GDP escalated to 17.4% in 2014. Aside from that, of the 288 IPOs registered last year, almost 40% were healthcare related.
The expanding industry supports 17.6 million American jobs and attributes for 12% of the GDP. Even though factory expansion slowed in December, the Institute for Supply Management reported its manufacturing index reached a three-year peak in October, and its manufacturing employment touched a four-month high.
Growth in manufacturing is tantamount to improvement in the logistics and transportation sector. Since 2010, private firms in the general freight trucking sector exhibited continued sales and profit growth. And advances in the industry displays a higher demand for local shipments.
Transit ridership has climbed nearly 40% since 1995. Buses, trains, and subways were used by more Americans in 2013 than in other years since 1956. This led to upgraded services as more individuals used the systems to obtain a higher number of jobs. Spending in the sector amounted to $1.33 trillion in 2012, accounting to 8.5% of GDP.