Want to know the biggest industries in the United States? The United States is a world economic power with the largest nominal GDP in the world, valued at 18.46 trillion dollars, which translates to 22% of the world nominal GDP.
The United States economy is divided into three broad categories, including the service sector, the manufacturing sector, and the agricultural sector.
With many industries playing a, major role to ensure the security of the United States economy some have performed excellently well above others and this leads us to the topic of the day.
Top 10 Largest Industries In The United States
1. Real estate, rental and leasing
Real estate, rental and leasing make up the largest sector of the United States economy, with a value-added in GDP of $1.898 trillion representing 13% of the national GDP. The sector contributes to the economy on two fronts; the first is through consumer spending through rent and payment for household services, and the other through residential investment encompassing the construction of new housing units, corridor fees, and residential remodeling. Also known as the housing sector, industry plays an integral role in the US economy, and the industry’s impact was best manifested during the 2008 recession, where a national decline in home prices triggered the worst US economic downturn.
2. State and local government
State and local governments have a combined GDP added value of $1.336 trillion to become the second-largest contributor to GDP accounting for 9% of the total GDP of the United States. Public spending is classified into two components, government investment and government final consumption spending. Government investment is defined as government spending used to finance projects with future or long-term benefits, such as research spending and infrastructure spending. Government final consumption, on the other hand, is government spending on items for direct consumption. State and local government expenditures are generally financed by national and international taxes or loans.
3. Finance and Insurance
The Finance and Insurance sector is another major contributor to GDP in the United States, and the industry has an added value of GDP of $1,159 trillion, which is equivalent to 8% of total GDP. The Finance and Insurance industry is made up of four distinct sectors that include insurance companies, credit brokerage and Federal Reserve banks, commodity and securities contracts, and trusts and funds and other financial vehicles. The growth of the financial and insurance industry is critical to the US economy as it helps facilitate US exports. The industry is also estimated to directly employ more than 5 million people in the United States, which is equivalent to 4% of the nation’s total employment.
4. Health and Social Assistance
The Health and Social Care industry in the country has an added value in the GDP of $1,136 billion and represents 8% of the national GDP. Healthcare, in particular, was a key component of the two sectors, and US spending on health care per capita was the largest in the world at $8,608. The rise in obesity and non-communicable diseases like cancer caused Americans to spend more on curative, rehabilitative and preventive care.
5. Durable manufacturing
Durable manufacturing is classified as the manufacturing sector dedicated to the production of durable products, such as computers, cars, firearms, sports equipment, household appliances, and airplanes, which are characterized by a long duration between purchases and are usually profitable. The durable manufacturing industry in the United States has an added value of the GDP of $910 billion which represents 6% of the national GDP. The sector is highly volatile and is affected by local and international factors, such as world oil prices, as well as the performance of the US dollar on international money markets. Durable manufacturing plays an important role in employment in the US economy.
6. Retail trade
The retail industry in the United States has an added value of GDP of $905 billion, which is equivalent to 6% of total GDP. The industry encompasses the retail process, which is the final stage in the distribution of basic products to the end consumer. The retail industry features fixed store retailers characterized by the fact that customers purchasing merchandise for home or personal consumption stay walk-in. The retail industry is the largest employer in the United States economy and the sector is responsible for 10% of total employment in the country. Data from the National Retail Federation shows that the industry directly or indirectly accounts for more than 15 million jobs.
7. Wholesale trade
Wholesale trade involves the mass distribution of products from producers to retailers or bulk consumers such as institutions and other wholesalers. Wholesalers are characterized by not spending on advertising directed to the general public and do not have their own facilities. Likewise, they are not designed for walk-in clients. The wholesale industry in the United States has an added value in GDP of $845 billion, which is equivalent to 6% of the total GDP. The industry is also a major employer with more than 5.7 million people or 4% of total employment in the US It is employed in the wholesale trade.
8. Non-durable manufacturing
The nondurable manufacturing industry is involved in the production of nondurable products, which can be defined as all products with a useful life of less than three years and include gasoline, electricity, and clothing, among others. Non-durable manufacturing is an important economic pillar in the United States and has an added value in GDP of $821 billion, which translates into 6% of the national GDP. While the nondurable manufacturing sector is less valuable than durable manufacturing, it employs far more people than durable manufacturing, accounting for 4.4 million jobs compared to 349,000 durable manufacturing jobs.
9. Federal government
The Federal Government occupies the ninth position with an added value of the GDP of $658 billion, which represents 5% of the total GDP. The federal government is a key employer in the economy, employing approximately 2.795 million Americans who work for the federal government. Health care, social security, and education account for the largest share of Federal Government investments representing 25%, 24%, and 15% of annual investments, respectively.
The information industry encompasses companies and institutions that are engaged in the production, transmission, processing, storage, and sale of information, which includes media companies, data-processing companies, law firms, and telephone companies, among others. The information industry is a key pillar of the US economy and has an added value of GDP of $646 billion, which is equivalent to 4% of total GDP. The sector is responsible for the employment of 2% of the total workforce in the United States, with a total of approximately 2.7 million jobs.
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