A Look at The Economy of The United States
The state of the economy of every country is determined by its GDP, probably business culture, the unemployment rate, inflation like during the COVID-19 pandemic, and many other related factors.
The USA has been at the helm in terms of ranking the best economies in the world and most countries are benchmarking to learn from them. Almost all of the biggest businesses in the world have originated from the USA and that is why this country is referred to as a super power.
This beautiful country has one of the highest living standards in the entire world, which continues to attract thousands of people from all over the world. We’ve discussed the factors that actually contribute to this nation’s top-tier economy and welcoming business environment in this post.
The United States, one of the best-performing economies in the world is an extremely wealthy country and a dream destination for many people across the world. The robust economy of this country has attracted many investors worldwide.
If you compare the USA to other countries with lower levels of industrialization, the country enjoys a high quality of life, an innovative economy, and a strong technological environment which attracts most of us.
The country boasts a one-of-a-kind global reputation in almost every aspect from education, to health, to the economy, you can name it all. Having a robust economy in the whole world means that the United States has an economic framework.
It’s just like everyone who earns a salary, you most probably have a budget so you can know where your money is going right after receiving it from your employer. In this case, we’re talking about the economic framework of a wealthy country and how it manages its salary (economy). Got it? Nice, let’s go on…
This economic framework has a very big impact in that choices about manufacturing, distribution, and expenditure are influenced by price signals that are generated by the factors of supply and demand.
High levels of production, a well-developed transportation system, and abundant natural resources all contribute to the American economy. By the way, the United States ranks second in terms of exports and is the largest importer in the world.
This North American country imports and exports in large quantities because of different reasons. First and foremost, the nation has free trade agreements in place with several countries and international partners. Some of these countries are Canada, Mexico, Australia, Israel, and South Korea among others.
Not only does the United States have the biggest internal marketplace for products, but it also influences the services sector. Believe it or not, of all the 500 biggest companies in the world, 121 of them are based in the U.S. Are you surprised?
Well, let me surprise you even further. Again, believe it or not, the United States has the highest number of billionaires (in U.S. Dollars) in the whole world with a combined net worth of $3.0 trillion.
Do you know what $3 trillion can do in your local currency? Do you know what $3 trillion can do in your life? Never mind, you might go wild.
One of the main reasons that propels the U.S. economy is that it has the world’s largest consumer market.
The country has one of the highest net migration rates in the world thanks to its job market, which has drawn immigrants from all over the world. This also explains why many people apply for green card to work in the States.
As I conclude this segment, let me take you back a bit. Remember what the COVID-19 pandemic did to the whole world? Yes, it tampered with the economy of every country because there were no movements of goods and people.
Credit: Reuters
The U.S. was not spared but remember they are in their A game so they can bounce back regardless. All these happened during Donald Trump’s presidency when major sectors of the economy like transportation of goods and movement of people were shut down.
In 2021, the US bounced back from the negative impacts of COVID-19 on its economy, increasing by 5.7%. This happened to be the best economic performance since Ronald Reagan’s presidency (1981-1989).
The United States GDP and U.S. Dollar
The USA is the world’s largest economy by nominal GDP. According to the latest reports from the World Bank, the U.S. GDP in real terms increased by an average of 1.7% between 2000 and the first half of 2014, which is less than half the historical average between 1900 and that time.
Economists argue that the root causes of the reduced growth since 2000, may include aging demographics. By the way, there are many old people in the United States. As we have mentioned earlier, the USA has one of the best quality of life hence, higher life expectancy.
But there was a time when the country experienced slow growth in population (around 2000). This impacted the economy negatively in such a way that productivity went down because of less workforce.
The productivity went down even further because investors and corporate entities reduced their services in the country but the USA is in a league of its own, they can definitely bounce back from whatever setback.
Another factor was the internet and technology. The internet was not as good as it is now, and there were few significant technological developments in the early 2000s. However, things started getting better with the rapid development of technology and easy access to the Internet.
The US dollar is the official reserve currency that is frequently utilized in cross-border transactions. It is the de facto money in some nations, while others like Zimbabwe, Ecuador, Panama, and Puerto Rico use it as their official currency.
The U.S. dollar has a reputation for being one of the most stable and powerful currencies in the world.
Despite ongoing competition, the US dollar continues to be the dominant reserve currency in every corner of the world. You’ve probably heard others speculate that the US dollar may eventually lose its place as the major reserve currency.
It has been predicted over time that the U.S. dollar will fall from its top spot as the world’s reserve currency, but such predictions are yet to come to pass. The chances of it happening are close to impossible.
In most cases, the U.S. dollar is the common currency unit used to quote, trade, and make payments for items on the international commodity markets. Even most forex traders mostly use the U.S. dollar to trade.
The Business Culture in The United States
The Business culture in the USA is friendly and is often accompanied by trends. For example, if a clothing company releases a fashion trend, influencers tend to promote the trend. Consumers dive in and they’ll most likely follow the trend and eventually, the business reaches its peak.
One of the most important aspects of the American economy is the degree of economic freedom and flexibility granted to the business community which sets the general course of action as well as the magnitude of the amount of economic output produced in the country.
This is made possible by a comparatively low level of regulation, little government intervention, and a legal system that often upholds ownership rights and contracts. Isn’t that friendly?
By the time I am writing this article, the United States has hosted 29.6 million small businesses, 30% of the world’s millionaires, 40% of the world’s billionaires, and 139 of the 500 largest business enterprises in the world.
The overall number of workers and, more significantly, how productive they are is a major factor in assessing the state of the American economy. Citizens of this country can come across as very friendly people in business.
For example, in September 2023, the president of the Republic of Kenya, His Excellency Hon. William Samoei Ruto opened the Swahili Village Restaurant in New York City and this restaurant has brought different cultures together.
American citizens have been so welcoming and many Kenyans tend to visit this restaurant once they land in the USA. Different cultures and the welcoming nature of these citizens have made businesses to be flawless. There are also Chinese restaurants, Japanese restaurants, African restaurants, and even South American restaurants.