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United States United States

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United States

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EconomicPoliticalStructural

Euromoney Country Risk editor’s view

The US is the world’s oldest federation.  The country operates under a constitutional republic. The current president is Barack Obama.  Citizens operate under three levels of government, federal, state, and local.  An ethnically diverse country, the US has the largest and most technologically powerful economy in the world. Classified by the World Bank as a high-income country, it is also a member of the Organization for Co-operation and Economic Development (OCED), despite the country experiencing rising structural unemployment in recent years.  Over three quarters of the GDP comes from the services sector. Capital goods make up almost half of the country’s exports.  

United States – Quick View
ECR score82.1 (Mar 2011)
ECR rank15 (Mar 2011)
Economic
GDP (2010)USD 14,660 billion
GNI per capita PPPUSD 45,640
FDI inflow (2009)USD 2,672,786 million
Inflation (2009)-0.4%
Central bank assets (2010)USD 2,280,952 million
Unemployment rate (2010)9.8%
Government deficit (2009)USD 1,271.9 billion
Tax revenue (2009)USD 2,409.3 billion
Political
Government typeFederal Government, Civic
Recent political crisisNA
Economic freedom score8th
Freedom of information score20th
Corruption perception index22nd
Structural
Birth rate13.8 per ‘000
Population balanceUnder 14 – 20.2%
Population balanceOver 65 – 12.8%
Life expectancy yearsMales – 75.8 years
Life expectancy yearsFemales – 80.8 years
Mortality rate8.38 per ‘000
Literacy rate99%
Internet access77.3%

[Top] Economic Overview

The United States has the world’s largest economy, supported by a number of industries including retail, financial services, manufacturing, information technology, mining, construction, and agriculture.

Gross domestic product (GDP)

United States recorded GDP of USD 14,660 billion in 2010, increasing 3.83% from 2009. The country has evinced a GDP growth rate of 0.04% CAGR between 2001 and 2010. Additonally, per capita GDP increased from USD 47,274 in 2010, to USD 45,918 in 2009.

(Source: BEA)

United States GDP and GDP Growth Rate

(Source: BEA)

Gross national income (GNI)

In 2009, GNI accounted to USD 14,011 billion, declining 2.26% from 2008.

(Source: World Bank)

United States GNI

(Source: World Bank)

Income tax rate

Income tax rates vary from 10% to 35% for individuals, depending on the following six income bands:

 

Tax rate (%)

Married Individuals Filing Joint Returns, and Surviving Spouses

Heads of Household

Unmarried Individuals (other than Surviving Spouses and Heads of Household)

Married Individuals Filing Separate Returns

USD

10

Up to 16,750

Up to 11,950

Up to 8,375

Up to 8,375

15

16,751 – 68,000

11,951 – 45,550

8,376 – 34,000

8,376 – 34,000

25

68,001 – 137,300

45,551 – 117,650

34,001 – 82,400

34,001 – 68,650

28

137,301 – 209,250

117,651 – 190,550

82,401 – 171,850

68,651 – 104,625

33

209,251 – 373,650

190,551 – 373,650

171,851 – 373,650

104,626 – 186,825

35

Above 373,651

Above 373,651

Above 373,651

Above 186,826

(Source: irs.gov)

Corporate tax rate

In the US, the corporate tax rate is 35%. The rate has stayed at this level since 1993.


(Source: OECD)

Inflation rate

Inflation rate was recorded at -0.4% in 2009, decreasing 4.2% from the previous year. The highest ever inflation rate in United States was 18% in 1918.

United States Inflation Rate

(Source: Bureau of Labor Statistics)

Foreign direct investment (FDI)

Between 2007-2009, FDI inflows to the US increased significantly. At the end of 2009, the total investment outflows totaled USD 4,051,191 million, increasing 8.24% over 2008. Furthermore, total investment inflows were USD 2,672,786 million, also increasing 6.01% compared to 2008.


(Source: BEA)

United States Foreign Direct Investment

(Source: BEA)

Foreign portfolio investment (FPI)

In Q3 of 2010, net FPI indicated a loss of USD 25,839 million, declining negatively by 10.54% compared to Q3 of 2009.

(Source: Federal Reserve System)

United States Net Portfolio Investment

(Source: Federal Reserve System)

Central bank assets

As of February 2010, total assets of the Federal Reserve (the central bank of the United States) stood at USD 2,280,952 million. These assets mainly included agency mortgage-backed securities, which amounted to USD 1,025,541 million.

(Source: Federal Reserve System)

[Top] Financial Indicators & Government Financial

Consumer price index (CPI)

In 2009, the United States reported a composite CPI of 214.53, where used cars and trucks were the largest contributors.

(Source: Bureau of Labor Statistics, BLS News Release)

 

Month

CPI

2009

January

211.14

February

212.19

March

212.71

April

213.24

May

213.86

June

215.69

July

215.35

August

215.83

September

215.97

October

216.18

November

216.33

December

215.95

2010

January

216.69

February

216.74

March

217.63

April

218.01

May

218.18

June

217.97

July

218.01

August

218.31

September

218.44

October

218.71

November

218.80


(Source:
Bureau of Labor Statistics)

Producer price index (PPI)

In 2010, the average annual PPI for finished goods was 179.93 points, for intermediate materials it was 183.21 points and for crude materials it was 211.79 points.

(Source: Bureau of Labor Statistics)

 

Month-wise PPI (2009 and 2010)

Month

Finished goods

Intermediate materials

Crude materials

2009

January

171.2

172.1

171.2

February

170.9

170.7

160.7

March

169.6

168.4

159.7

April

170.6

168.6

163.5

May

170.6

169.4

168.7

June

173.7

171.3

175.9

July

171.6

170.4

170.1

August

174.1

173.3

177.8

September

173.3

173.3

173.9

October

173.6

174.0

186.1

November

176.2

176.0

193.9

December

177.1

177.3

197.1

2010

January

179.4

180.6

213.8

February

178.5

180.6

208.5

March

179.9

181.8

212.4

April

179.7

183.2

210.7

May

179.1

183.4

205.4

June

178.3

181.8

200.0

July

178.5

181.0

205.6

August

179.7

182.2

210.9

September

180.2

182.8

209.1

October

181.0

185.0

218.0

November

182.4

187.1

219.2

December

182.4

189.0

227.9

             

(Source: Bureau of Labor Statistics)

Interest rates

During 2010, the average interest rate on certificates of deposit (CDs) in the secondary markets was 0.24% for 1 month maturity period, 0.31% for 3 months and 0.44% for 6 months.

(Source: Federal Reserve)

Average annual interest rates on CDs (%)

Year

Maturity period

1 month

3 months

6 months

2000

6.35

6.46

6.59

2001

3.84

3.71

3.66

2002

1.72

1.73

1.81

2003

1.15

1.15

1.17

2004

1.45

1.57

1.74

2005

3.34

3.51

3.73

2006

5.06

5.16

5.24

2007

5.23

5.27

5.23

2008

2.73

2.97

3.14

2009

0.30

0.55

0.87

2010

0.24

0.31

0.44


(Source: Federal Reserve)

Interest rates on loans to prime customers in 2010 was 3.25%, unchanged from the previous year.

United States Prime Interest Rates on Loans

(Source: Federal Reserve)

Money stock measures

The United States classifies its money stock into M1 and M2.

M1 includes:

  • Currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions
  • Traveler's checks of non-bank issuers
  • Demand deposits at commercial banks (excluding amounts held by depository institutions, U.S. government, foreign banks and official institutions)
  • Other checkable deposits
  • Credit union share draft accounts
  • Demand deposits at thrift institutions

M2 includes all items of M1 and:

  • Savings deposits (including money market deposit accounts)
  • Small-denomination time deposits (time deposits in amounts of less than USD 100,000)
  • Balances in retail money market mutual funds less IRA and Keogh balances at money market mutual funds.

(Source: Federal Reserve System)

 

Money Stock Measures (USD billions)

Month

M1

M2

2009

January

1583.5

8316.7

February

1574.0

8356.7

March

1577.4

8409.9

April

1608.5

8364.3

May

1608.5

8436.7

June

1646.2

8453.0

July

1649.9

8443.0

August

1648.4

8419.7

September

1660.8

8459.3

October

1676.2

8492.1

November

1687.5

8523.3

December

1696.6

8542.8

2010

January

1680.7

8486.0

February

1714.8

8545.7

March

1713.1

8519.9

April

1701.4

8490.6

May

1706.0

8573.0

June

1721.5

8604.6

July

1716.5

8603.3

August

1742.8

8649.4

September

1765.7

8709.0

October

1779.6

8767.0

November

1832.0

8804.

 

(Source: Federal Reserve System)

Official exchange rate

The average exchange rate for USD during the 2000 to 2009 period was 1.70 for sterling (GBP), 1.19 for euro and 0.70 for australian dollars (AUD).

Following are the average exchange rates (yearly) from 2000 to 2009:

 

Year

GBP

Euro

AUD

2000

1.52

0.92

0.58

2001

1.44

0.89

0.52

2002

1.50

0.94

0.54

2003

1.63

1.13

0.65

2004

1.83

1.24

0.73

2005

1.82

1.24

0.76

2006

1.84

1.26

0.75

2007

2.00

1.37

0.84

2008

1.85

1.47

0.85

2009

1.57

1.39

0.79


(Source: Federal Reserve System)

Government finances

Total revenue and expenditure

In 2009, total Government revenue stood at USD 3,726.9 billion, falling by 8.52% from 2008.  Furthermore, the total Government expenditures increased by 5.51% up to USD 4,998.8 billion.

(Source: Bureau of Economic Analysis)

United States Government Revenue and Expenditure

(Source: Bureau of Economic Analysis)

Government Revenue Distribution (2009)

United States Government Revenue Distribution


(Source: Bureau of Economic Analysis)

Public sector borrowing requirement / fiscal balance

In 2009, the total fiscal balance accounted for a deficit of USD 1,271.9 billion. Furthermore, the account has reported continuous losses since 2002.

(Source: Bureau of Economic Analysis)

Tax revenue

In 2009, total tax revenue was reported at USD 2,409.3 billion, which includes personal current taxes, taxes on production and imports, taxes on corporate income, and taxes from the rest of the world. Additonally, compared to 2008, it declined by 13.34%.

United States Contribution towards Tax Revenue

(Source: Bureau of Economic Analysis)

Balance of payment (BoP)

 

Particulars

2005

2006

2007

2008

2009

USD millions

Current Account

Exports of goods and services and income receipts

1,816,449

2,135,004

2,478,267

2,635,540

2,159,000

Exports of goods and services

1,281,186

1,452,783

1,648,665

1,839,012

1,570,797

Income receipts

909,016

1,035,868

1,160,366

1,304,896

1,068,499

Imports of goods and services and income payments

372,171

416,916

488,299

534,116

502,298

Imports of goods and services

12,164

15,678

17,216

14,936

17,096

Income payments

-462,905

-634,136

-730,049

-644,554

-466,783

Unilateral current transfers, net

-453,615

-624,646

-719,983

-634,190

-456,027

Capital Account

Capital account transactions, net

13,116

-1,788

384

6,010

-140

US-owned assets abroad, excluding financial derivatives (increase/financial outflow (-))

-546,631

-1,285,729

-1,475,719

156,077

-140,465

Foreign-owned assets in the United States, excluding financial derivatives (increase/financial inflow (+))

-546,631

-1,285,729

-1,475,719

156,077

-140,465

Other foreign assets in the United States

14,096

2,374

-122

-4,848

-52,256

Balance on goods

0

0

0

0

0

Balance on services

4,511

-223

-154

-106

-48,230

Balance on goods and services

10,200

3,331

1,021

-3,473

-3,357

Balance on income

-615

-734

-989

-1,269

-669

Unilateral current transfers, net

5,539

5,346

-22,273

-529,615

541,342

Balance on current account

-2,255

-2,992

-2,475

-2,202

-4,06

 (Source: Bureau of Economic Analysis)