Introduction
The U.S economy remains the largest in the world despite the ever increasing threat from emerging markets like China and the expanding Euro Zone. The positive indicators of the American state of economy include the growth rate recorded in the last quarter of 2018 and the first quarter of 2019. An economy is judged as having positive growth when the unemployment levels are declining, wages are increasing while inflation as well as national debt decreasing. A snapshot of the American economy shows positive indicators. As posited by Long (2018), the present American economy has more jobs than in the last five years, the stock market continues to record increased trading levels as well as confidence from the consumers. Inflation remains tamed but this positive growth is still low compared to what it was many years back. Therefore, this essay looks at the positive state of the U.S economy.
According to Focus Economics (2019) in spite of the challenges that the U.S economy faces at both domestic and international level, the country’s economic remains the most important and largest in world. For instance, the U.S economy accounts for close to 20% of the total global economic output. Further, it is still bigger than the Chinese economy. Figures from the International Monetary Fund (IMF) indicate that the U.S has the sixth highest per capita of GDP in the world. The country’s economy has a highly established and developed and technologically-based and flourishing service sector which employs millions of Americans. The American economy is dominated by service-based companies in technology, financial sector and healthcare as well as retail that account for close to 80% of its national output.
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Campbell (2019) observes that the American economy continues to grow at a steady pace under the current Trump administration, just like it did during the final two years of the previous administration. The expansion of the economy over the last four years has been slow but steady. While many believe that most of the benefits of the current growth go to the wealthiest Americans, figures from the World Economic Forum shows that the American economy has benefited all Americans; especially low-income households. For instance, tax cuts have allowed the stock market to record increased growth. Further, interest rates are at an all time low with analysts at the Financial Times warning that retaining the rates at the current level may lead to inflation in the market. The strong economy has made the Federal Reserve to increase interest rates. Imperatively, the Federal Reserve maintains the federal funds target rate at 2.5% while the average 30-year prime mortgage rate stands at 4.6%.
Consumer spending in the U.S has increased due to a strengthened labor market. However, wage growth continues to be subdued with the intention of controlling inflation. Analysts at the Financial Times (2019) observe that limited signs of growth in runaway spending exist as consumers remain cautious of overspending. The implication is that Federal Reserve has maintained its inflation rate target of 2% as a metric to inform them of the necessary policies that will reduce overspending and inflation. The labor market continues to show stronger growth signs making the Federal Reserve to consider raising interest rates to curb inflation (Fleming et al., 2019). The U.S economy is approaching full employment and concerns about wage growth are coming real every day. Such demands could accelerate the rate of inflation above the projected 2% by the Federal Reserve. Today, the United States records the highest amount of job openings with the rate of unemployment being the lowest in the last two decades. The current unemployment rate is less that 4% implying that that country is almost attaining full employment. Unemployment is at its lowest level among the racial minorities; African Americans and Hispanic (Long, 2018). The implication is that most people in the country can find work and contribute to the country’s overall economic growth.
The U.S economy continues to show its positive stature as an innovation powerhouse that drives the global innovation and technology. The economy generates groundbreaking innovative products through its vibrant research in its dynamic firms, universities and R&D labs. The U.S remains the second in the world’s competitiveness Index because of its good ratings in innovation. Further, venture capital funding is at an all time high and responsible for business innovations in the Silicon Valley (Hardach, 2018). While its service-based innovation business is the main driver of its economy, the U.S also possesses one of the most vibrant manufacturing industries that accounts for about 15% of its total output. This industry makes it the second largest manufacturer and leader in higher-end industries like automobiles, telecommunication, chemicals, and machinery as well as aerospace. The country’s agricultural sector accounts for about 2% of its GDP but due to vast amounts of arable land and better farming technology, the U.S. remains an exporter of food to markets like China and Europe (Focus Economics, 2019).
Conclusion
It is evident that a host of factors make the United States one of the largest and vibrant economies on the planet. The positive state of the American economy indicates that sound government policies and cautious implementation of necessary policies and fiscal measures can allow the nation to record even better growth rates. Imperatively, the U.S economy is at its steady growth augmented by an easing global business environment and talks to end the trade wars with China.
References
Campbell, A. F. (2019). 5 things to know about the US economy during Trump’s State of the Union. Retrieved from https://www.vox.com/2019/2/5/18210757/state-of-union-2019-economy-fact-check
Fleming, S., Tetlow, G., Bernard, S., Pearson, T. & Bissell, J. (2019). US economy: statistics at a glance. Retrieved from https://ig.ft.com/sites/numbers/economies/us/
Focus Economics (2019). U. S. Economic Outlook. Retrieved from https://www.focus-economics.com/countries/united-states
Hardach, S. (2018). The state of the US economy in 11 charts. Retrieved from https://www.weforum.org/agenda/2018/07/heres-the-state-of-the-us-economy-in-11-charts/
Long, H. (2018). Trump says U.S. economy may be the ‘greatest in history.’ Let’s check the record. Retrieved from https://www.washingtonpost.com/news/wonk/wp/2018/06/05/trump-says-u-s-economy-may-be-the-greatest-in-history-lets-check-the-record/?noredirect=on&utm_term=.fbe5da47d216
