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Category: Economic growth and fiscal policy
Last Updated: 3 June 2020 This page is dedicated to the economic growth rate (GDP) of the United States. We will be digging into the US GDP numbers on a regular basis to provide in depth details about the factors driving the economic growth of the biggest economy in the world.
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3 June 2020: Unit labor cost and productivity in 2019
Below we take a look at unit labor cost and productivity for selected services related industries. The extract below comes from the Bureau of Labor Statistics. These two measures play a critical role in determining the productivity of various industries and the economy as a whole as well as highlight potential industries where labor costs are increasing disproportionately to the national average.
Labor productivity rose in 14 of 29 selected service-providing industries in 2019, compared to 2018 when labor productivity increased in 21 of 29 industries. Unit labor costs declined in 5 industries in 2019. Each of the industries with a decline in unit labor costs also recorded an increase in productivity.
Labor productivity rose in 14 of 29 selected service-providing industries in 2019, compared to 2018 when labor productivity increased in 21 of 29 industries. Unit labor costs declined in 5 industries in 2019. Each of the industries with a decline in unit labor costs also recorded an increase in productivity.
From 2018 to 2019, the largest declines in unit labor costs were in periodical publishers (−6.7 percent) and gambling industries (−5.3 percent). Each of the industries where productivity fell also recorded an increase in unit labor costs. The largest increases in unit labor costs were in general freight, local (18.4 percent) and couriers and messengers (13.2 percent), where labor productivity decreased by 11.2 percent and 10.8 percent, respectively.
These data are from the Labor Productivity and Costs program. Unit labor costs represent the cost of labor required to produce one unit of output. The unit labor cost indexes are computed by dividing an index of nominal industry labor compensation by an index of real industry output. Unit labor costs also describe the relationship between compensation per hour and real output per hour (labor productivity). Increases in hourly compensation increase unit labor costs; increases in labor productivity offset compensation increases and reduce unit labor costs
These data are from the Labor Productivity and Costs program. Unit labor costs represent the cost of labor required to produce one unit of output. The unit labor cost indexes are computed by dividing an index of nominal industry labor compensation by an index of real industry output. Unit labor costs also describe the relationship between compensation per hour and real output per hour (labor productivity). Increases in hourly compensation increase unit labor costs; increases in labor productivity offset compensation increases and reduce unit labor costs
14 May 2020: Value added per industry for Q4:2019
The summary below shows the value added per industry for Q4:2020, in $ billions. The percentage in brackets shows the contribution of each industry to total value added:
Gross domestic product: $21 729
So government makes up 12,27% of the US economy's value added, with finance, insurance, real estate, rental and leasing make up almost 21% of the US total value added. This is the biggest industry in the United States. Professional and business services makes up almost 13% of value added in the US, with manufacturing making up just under 11%, and wholesale and retail making up 5.95% and 5.47% respectively.
Gross domestic product: $21 729
- Private industries: $19 062 (87.73%)
- Agriculture, forestry, fishing, and hunting: $177 (0.8%)
- Mining: $314 (1.45%)
- Utilities: $338 (1.55%)
- Construction: $901 (4.15%)
- Manufacturing: $2381 (10.96%)
- Wholesale trade: $1293 (5.95%)
- Retail trade: $1190 (5.47%)
- Transportation and warehousing: $690 (3.17%)
- Information: $1137 (5.23%)
- Finance, insurance, real estate, rental, and leasing: $4 556 (20.96%)
- Professional and business services: $2 793 (12.85%)
- Educational services, health care, and social assistance: $1 916 (8.82%)
- Arts, entertainment, recreation, accommodation, and food services: $913 (4.20%)
- Other services, except government: $464.1 (2.14%)
- Government: $2 667 (12.27%)
So government makes up 12,27% of the US economy's value added, with finance, insurance, real estate, rental and leasing make up almost 21% of the US total value added. This is the biggest industry in the United States. Professional and business services makes up almost 13% of value added in the US, with manufacturing making up just under 11%, and wholesale and retail making up 5.95% and 5.47% respectively.
29 April 2020: Real GDP in the US for Q1:2020 came in at -4.8%
The Bureau of Economic Analysis had the following to say regarding the 1st quarter 2020 U.S GDP
Coronavirus (COVID-19) Impact on First-Quarter 2020 GDP Real GDP decreased 4.8 percent (annual rate) in the first quarter of 2020, following a 2.1 percent increase in the fourth quarter of 2019. The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.
Coronavirus (COVID-19) Impact on First-Quarter 2020 GDP Real GDP decreased 4.8 percent (annual rate) in the first quarter of 2020, following a 2.1 percent increase in the fourth quarter of 2019. The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified.
The image above show the quarter on quarter annualised GDP growth rates in the USA per quarter from the 2nd quarter of 2016, and as the image shows the decline is the first decline (negative economic growth rate) in a very long time for the USA, and it is significant, as the impact of Covid-19 and the related lockdowns and social distancing measures started taking hold. We predict the second quarter of 2019 to see an even bigger decline in economic growth.