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A SERVICE ECONOMY
Services produced by private industry accounted for 67.8 percent of U.S.
gross domestic product in 2006, with real estate and financial services such as
banking, insurance, and investment on top. Some other categories of services are
wholesale and retail sales; transportation; health care; legal, scientific, and
management services; education; arts; entertainment; recreation; hotels and
other accommodation; restaurants, bars, and other food and beverage services.
Production of goods accounted for 19.8 percent of GDP: manufacturing—such as
computers, autos, aircraft, machinery—12.1 percent; construction, 4.9 percent;
oil and gas drilling and other mining, 1.9 percent; agriculture, less than 1
percent.
Federal, state, and local governments accounted for the rest—12.4 percent of
GDP.
The most rapidly expanding sectors are financial services; professional,
scientific, and technical services; durable goods manufacturing, especially
computers and electronic products; real estate; and health care.
Decreasing their share of GDP growth are agriculture and mining and some
other kinds of manufacturing, such as textiles. "Low-value, commodity-based
manufacturing is disappearing from the United States, moving to developing
nations where routine manufacturing can be performed at low cost," the Council
on Competitiveness says.
Yet the United States remains the world's top manufacturing country, its
factories producing goods worth $1.49 trillion in 2005, 1.5 times the level in
the next country, Japan. And the value of U.S. agricultural production trails
that of only China and India.
Even though agriculture now has a small share of GDP, farmers remain
economically and politically powerful forces. In 2002 the market value of U.S.
farm production amounted to more than $200 billion, including $45 billion for
cattle and calves; nearly $40 billion for grains, such as corn and wheat, and
oilseeds such as soybeans; nearly $24 billion for poultry and eggs; $20 billion
for milk and other dairy products; and $12 billion for hogs and pigs.
Even though the United States has more than 2 million farms, a relatively
tiny number of big corporate farms dominate—1.6 percent of farms in 2002
accounted for half of all sales.
Despite its overall trade deficit, the United States has a surplus in
agriculture. U.S. farm exports in 2007 are forecast at $78 billion, with the
largest share going to Asian countries, although Canada and Mexico account for
the largest share of recent growth in agricultural exports. About one-fourth of
U.S. farm output is exported.
The United States also maintains a trade surplus in services, $79.7 billion
in 2006. The biggest U.S. services export category was travel by foreigners to
the United States, $85.8 billion that year.
In contrast, the United States runs a large and growing deficit in
merchandise goods trade. While the United States exported more than $1 trillion
in goods in 2006, it imported more than $1.8 trillion worth.
By far the top imports that year were autos and auto parts, $211.9 billion,
and crude oil, $225.2 billion. The top sources of U.S. imports were Canada,
China, Mexico, Japan, and Germany.
Among the top U.S. exports in 2006 were autos and auto parts, semiconductors,
and civilian aircraft. The top U.S. export destinations were Canada, Mexico,
Japan, China, and the United Kingdom.
In 2000-2006, even though U.S. goods exports increased 33 percent, U.S. goods
imports went up even faster, 52 percent; the goods deficit nearly doubled over
those years.
The $758.5 billion trade deficit amounted to 5.7 percent of 2006 GDP, a level
viewed as unsustainable by many economists because it relies on continuing
inflows of foreign investment to pay for it.
But what makes the U.S. economy so dynamic?
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