The United States have significantly increased their Gross Domestic Product (GDP), by 1% since 2013. However, it is estimated that the US growth rate will slowly decline in the next few years, despite the increase of the worldwide GDP, which is mostly attributed to the high GDP growth of developing economies.
According to the International Monetary Fund’s World Economic Outlook Database, the US total GDP, amounted to $17.9 trillion in 2015. The annual GDP growth was 2.5% -increased by 0.1% compared to 2014. However, this is expected to decrease after 2016.
The deficit has greatly decreased (under Obama’s presidency), as a result of increased economic growth, cuts to discretionary spending in the Budget Control Act (BCA), and the restoration of tax rates on the highest earners to 1990s levels in the American Taxpayer Relief Act. Under these policies, the deficit will continue to fall and is expected to decline to below 2% of the GDP, by 2023.
According to the U.S. Department of Commerce (2015 data), US exports were up more than $760 billion, since 2009. The United States was the world’s second largest exporter -behind China- and the 1st largest importer worldwide. More specifically, in 2015 the International Trade Deficit of goods and services, was US $540 billion. Total exports slightly decreased to US $2.22 trillion –mainly due to reduced exports in goods- compared to 2014 that was US $2.35 trillion. Imports followed the same trend, expressed by a slight reduction (Chart 2). In the same year, the largest export markets for US goods, were Canada, Mexico, and China.
More specifically, the US have had a high trade deficit in goods, with small fluctuations since 2011 (Chart 3). This is a result of reduced good exports compared to the imports of goods. However, the negative trade balance in goods is counterbalanced by the low volume of imports in services, as a result of the trust shown by American citizens, to the US services. In fact the overall Trade Balance deficit has increased since 2014, while the Foreign Direct Investment (FDI) for 2014, was decreased to US $131,8 trillion.
Despite the high deficit in 2015, there was a surplus of about US $95.9 billion in the Aircraft & Spacecraft category, as a result of the increased related exports.
As exports have always played a critical role in the US economic growth, the government has set an ambitious trade agenda to open up more markets to ‘Made in America’ goods and services. Trade promotion legislation and the strong trade agreements enactment, are at the centre of this agenda.
Since 1980, there has been an accelerated decline in manufacturing employment, while employment in service-producing industries in the US economy, has rapidly expanded. Employment in professional and business services and in education services, grew significantly in the last three decades. However, the financial crisis that started in 2007, had as a result the peak of unemployment to the unprecedented levels –since 1983- of 9.3%, in 2010. The unemployment rate for 2015 was 5.3%, with US estimates showing that this will further decrease to 4.6% in 2016.