Performance of USA Economy from 2008 to 2018

ECONOMICS
Economics
Name of the Student
Name of the University
Course ID

ECONOMICS1
Introduction
The economy of USA is known as one of the most developed mixed economy. In
terms of nominal GDP the country ranks first while in terms of purchasing power parity the
nation stands second. The natural resources and associated sectors developed based on these
resource has made USA one of the largest economy of the world (Imf.org. 2018). USA is
blessed with the abundance of six primary natural resources. The nation possesses a large
area of land mass controlled by single political system. Two large coastlines bordered the
nation that earlier provided food and later ports to help in commerce. The country has large
acres of fertile land that help in the development of fertile land. USA has abundant fresh
water.
The industrial sector of USA is second largest in the world constituting a real output
valued US$2 trillion in the first quarter of 2018. The industrial sector is further subdivide into
different sectors. Real estate along with Renting and Leasing account the largest share of
GDP. The sector plays an integrated role in US economy. The next important sector is
Finance and Insurance sector contributing 8 percent in GDP. The sector particularly helps
the economy to facilitate export. The Health and Social Care industry makes up a significant
portion of USA’s GDP (Sawe 2019). Besides these, other important industries of USA
include Durable Manufacturing, Retail Trade, Wholesale Trade, Non-Durable
Manufacturing and Information industry.
Production output performance analysis
The first primary determinant of economic performance of a nation is the aggregate
output. One composite indicator of aggregate output of a nation is Gross Domestic Product.
In the essay, output performance of USA has been analyzed in terms of real GDP, real GDP
growth rate and per capita real GDP.

ECONOMICS2
Real GDP
Gross Domestic Product is considered as a measure of aggregate output of nation. It
gives an estimation of produced goods and services in a nation in monetary terms. It is a
quantitative measure that estimate aggregate value of total output using market price and
produced output. Estimation can be based on either market price of current accounting year
or market price of a previously fixed based year. GDP estimated at current year prices is
termed as nominal GDP while GDP computed at a fixed base year prices is termed as real
GDP (Gottheil 2013). Real GDP thus provides an inflation adjusted measure for aggregate
output.
Figure 1: Real GDP in USA
(Source: Tradingeconomics.com 2019)
The above figure indicates trend of real GDP from 2008 to 2018. Real GDP in USA
recorded a decline in between 2008 and 2009. The fall in real GDP was due to the hit of
global financial crisis. The crisis first originated in the housing market and then spread all
over the economy. Housing price in USA reached to the peak in 2006 and then suddenly

ECONOMICS3
started to decline since last half of 2007. Housing market crashed in 2008 resulting in an
economy wide crisis (Chen et al. 2016). USA economy recovered at a relatively slower pace
from the recession. Since then USA recorded a steady rise in the real GDP.
Real GDP growth rate
The real GDP growth rate is used as a measure of tracing trend economic growth of a
nation. Growth in real GDP is expressed as a change in real GDP in a year as a percentage of
real GDP in the previous year. As real GDP is adjusted for any change in the price level,
growth in real GDP provides an accurate measure of economic growth.
Figure 2: Real GDP growth rate in USA
(Source: Tradingeconomics.com 2019)
As revealed from the above the figure, USA economy recorded a downfall due to
recessionary pressure in 2008. Real GDP growth rate began to contract since the third quarter
of 2008. By the beginning of 2009, growth became negative; the slowest grow ever since
1950. With active government measure, the economy began to recover since latter half of
2009 and recorded an average growth rate of 2.3 percent since then. Economic growth though
fluctuated but remained around an average rate of 2 percent.