United States GDP Growth Rate

The Gross Domestic Product (GDP) in the United States expanded at an annual rate of 5.90 percent in the last quarter. The United States Gross Domestic Product is worth 14204 billion dollars or 22.91% of the world economy, according to the World Bank. The economy of the United States is the largest in the world. The United States is a market-oriented economy where private individuals and business firms make most of the decisions. The federal and state governments buy needed goods and services predominantly in the private marketplace. This page includes: United States GDP Growth Rate chart, historical data and news.

Country	Interest Rate	Growth Rate	Inflation Rate	Jobless Rate	Current Account	Exchange Rate
United States	0.25%	5.90%	2.60%	9.70%	-108	80.4550

Year	Mar	Jun	Sep	Dec	Average
2009	-6.40	-0.70	2.20	5.90	0.25
2008	-0.70	1.50	-2.70	-5.40	-1.83
2007	1.20	3.20	3.60	2.10	2.53

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Despite Recent Growth, US Recovery is Still Weak
Published: 2/26/2010 3:16:38 PM By: Anna Fedec, contact@tradingeconomics.com

In the fourth quarter of 2009, the United States economy expanded at an annualized rate of 5.9% giving the impression that the recovery in world’s largest economy has been stronger than expected. Yet, growth was mainly due to inventory rebuilding and the recent economic expansion maybe short lived.

Indeed, on a year over year basis, the US economy grew only 0.1%, which is not very strong having in mind that in the last three months of 2008 US output deteriorated by 1.9%. Moreover, surprising strong expansion in the fourth quarter of 2009 may not last in 2010 as 3.9 percentage points out of 5.9% growth came from inventory rebuilding. And once companies will adjust to demand level, the production is likely to slow down. In fact, in January durable goods orders, excluding transportation, slipped 0.6% and business spending dropped 2.9%.  

Looking further, households demand is necessary to elevate production levels and the poor condition of the labor market is having a negative impact on the recovery pace. Indeed, the US economy has lost 7.3 million jobs since the recession began in December 2007. And the job creation promise made by many politicians is not working because the unemployment rate is the highest in 26 years. In fact, consumer sentiment was weaker in February as more Americans became impatient with the government's effort to stimulate jobs.

To make things even worst, the biggest fiscal deficit on record combined with the anticipation of low interest rates for a long time is discouraging investors from depositing money in the United States. In fact, the US government deficit is likely to reach 10.6% of GDP in 2010 and the Obama administration is projecting that national debt will rise from 64% of national output to 77% by 2020. More importantly, the US economy may experience a significant slowdown when the Federal Reserve exits from its unconventional policy easing, and is forced to increase rates to fight inflation.

United States Economic News

Payrolls in U.S. Fell 36,000; Unemployment at 9.7%
Published: 3/5/2010 9:17:26 AM By: TradingEconomics.com, Bloomberg

The jobless rate in the U.S. held at 9.7 percent in February and employment declined less than forecast, even as severe winter weather forced some employers to temporarily close.

ADP Says U.S. Companies Cut 20,000 Jobs in February
Published: 3/3/2010 11:16:51 AM By: TradingEconomics.com, Bloomberg

U.S. companies in February cut the fewest jobs in two years, according to data from a private report based on payrolls.

U.S. Economy Grew at 5.9% in Q4
Published: 2/26/2010 9:48:01 AM By: TradingEconomics.com, Bloomberg

The U.S. economy expanded at a 5.9 percent annual rate in the fourth quarter, more than the government reported last month, reflecting stronger business investment and a greater contribution from inventories.

Consumer Confidence in U.S. Falls
Published: 2/23/2010 10:38:02 AM By: TradingEconomics.com, Bloomberg

Confidence among U.S. consumers fell more than anticipated in February to the lowest level since April 2009 as the outlook for jobs diminished, a sign spending may be slow to gain traction as the economy recovers

US Inflation Rises 0.2%
Published: 2/19/2010 9:43:48 AM By: TradingEconomics.com, Bloomberg

The cost of living in the U.S. rose in January less than anticipated and a measure of prices excluding food and fuel fell for the first time since 1982, indicating the recovery is showing few signs of inflation.

Fed Raises Discount Rate by Quarter-Point to 0.75%
Published: 2/18/2010 5:44:12 PM By: TradingEconomics.com, Federal Reserve

The Federal Reserve Board raised the discount rate charged to banks for direct loans by a quarter point to 0.75 percent and said the move will encourage financial institutions to rely more on money markets rather than the central bank for short-term liquidity needs.

Trade Deficit in U.S. Widened in December
Published: 2/10/2010 10:48:14 AM By: TradingEconomics.com, Bloomberg

The trade deficit in the U.S. unexpectedly widened in December, reflecting a jump in petroleum imports that swamped an eighth consecutive gain in exports.

US Payrolls Fall in January, Unemployment at 9.7%
Published: 2/5/2010 8:38:28 AM By: TradingEconomics.com, Reuters

Employers unexpectedly cut 20,000 in January, but the unemployment rate surprisingly fell to a five-month low of 9.7 percent, according to a government report on Friday that hinted at some labor market improvement starting to take root.

ADP Says U.S. Companies Cut Estimated 22,000 Jobs
Published: 2/3/2010 9:32:30 AM By: TradingEconomics.com, Bloomberg

Companies in the U.S. cut an estimated 22,000 jobs in January, in line with forecasts, according to data from a private report based on payrolls.

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GDP Growth Definition

Economic growth is the increase in value of the goods and services produced by an economy. It is conventionally measured as the percent rate of increase in real gross domestic product, or GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in order to net out the effect of inflation on the price of the goods and services produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment," which is caused by growth in aggregate demand or observed output.As economic growth is measured as the annual percent change of National Income it has all the advantages and drawbacks of that level variable. But people tend to attach a particular value to the annual percentage change, perhaps since it tells them what happens to their pay check.

The real GDP per capita of an economy is often used as an indicator of the average standard of living of individuals in that country, and economic growth is therefore often seen as indicating an increase in the average standard of living.However, there are some problems in using growth in GDP per capita to measure general well being.GDP per capita does not provide any information relevant to the distribution of income in a country. GDP per capita does not take into account negative externalities from pollution consequent to economic growth. Thus, the amount of growth may be overstated once we take pollution into account. GDP per capita does not take into account positive externalities that may result from services such as education and health. GDP per capita excludes the value of all the activities that take place outside of the market place (such as cost-free leisure activities like hiking).

Economists are well aware of these deficiencies in GDP, thus, it should always be viewed merely as an indicator and not an absolute scale. Economists have developed mathematical tools to measure inequality, such as the Gini Coefficient. There are also alternate ways of measurement that consider the negative externalities that may result from pollution and resource depletion (see Green Gross Domestic Product.)The flaws of GDP may be important when studying public policy, however, for the purposes of economic growth in the long run it tends to be a very good indicator. There is no other indicator in economics which is as universal or as widely accepted as the GDP.Economic growth is exponential, where the exponent is determined by the PPP annual GDP growth rate. Thus, the differences in the annual growth from country A to country B will multiply up over the years. For example, a growth rate of 5% seems similar to 3%, but over two decades, the first economy would have grown by 165%, the second only by 80% (source: wikipedia).