US business firms have more flexibility than their counterparts in Western Europe and Japan in decision making when it comes to expanding the capital plant, lay off surplus workers, and develop new products. At the same time, they face higher barriers to entry in competeing overseas markets than foreign firms do in the US.

US firms are at or near the vanguard in technological advances, especially in computers and in medical, aerospace, and military equipment. This advantage has narrowed since the end of World War II. The onrush of technology in the US can also explain the gradual development of a two-tier labour market where those at the bottom receive less training and benefits than those at the top.

Although the US strongly advocates free market principles, the government still plays a major role in dictating the US economy. The US still relies on the government to address matters that the private sector overlooks, from education to protecting the environment. From time to time, the US government has also been tasked with nurturing new industries, and also protect American companies from foreign competition. This is clearly visible from the highly subsidized agriculture industry in the US

As such, the US economy is best described as a mixed economy where the economic structure is upheld through the interactions between the private, public and international sector. As the leading economy in the world, fluctuations in the US economy have had far reaching impact on other economies throughout the globe.

Ever since the 1960s, the US economy has been primarily responsible for absorbing global savings. Despite the challenge from emerging economies, the US remains the most heavily invested-into country in the world, with foreign direct investments at home worth $2.398 trillion in 2010. The US is also the largest investor in the world, investing $3.259 trillion abroad in 2010.

US Economic Geography

The US is the third largest country in the world, in terms of both land area and population. As the world’s largest economy, many of the world’s key financial and economic institutions reside within the US. The US is home to the world's largest stock exchange, the world's largest gold depository and reserves, and 139 of the world's 500 largest companies, which is almost twice that of any other country.

The US also has an abundance of natural resources. Apart from having the world’s largest proven reserves of coal, 22.6 percent of the world’s total, the US also possesses the 14^th largest proven oil reserves and the 6^th largest proven natural gas reserves. Other natural resources include copper, lead, molybdenum, phosphates, uranium, bauxite, gold, iron, mercury, nickel, potash, silver, tungsten, zinc, and timber.

Within the US, individual states can often have entirely distinct and unique economies. The list below ranks individual US states according to its GDP in 2010.

Click on the individual states to find out more about their economies on EconomyWatch.

1. California: $1.936 trillion

2. Texas: $1.153 trillion

3. New York: $1.114 trillion

4. Florida: $754 billion

5. Illinois: $644.2 billion

6. Pennsylvania: $575.6 billion

7. New Jersey: $497 billion

8. Ohio: $483.4 billion

9. Virginia: $427.7 billion

10. North Carolina: $407.4 billion

11. Georgia: $404.6 billion

12. Michigan: $372.4 billion

13. Massachusetts: $377.7 billion

14. Washington: $351.1 billion

15. Maryland: $300 billion

16. Indiana: $267.6 billion

17. Minnesota: $267.1 billion

18. Arizona: $261.3 billion

19. Colorado: $259.7 billion

20. Tennessee: $250.3 billion

21. Wisconsin: $251.4 billion

22. Missouri: $246.7 billion

23. Connecticut: $233.4 billion

24. Louisiana: $213.6 billion

25. Alabama: $174.4 billion

26. Oregon: $168.9 billion

27. South Carolina: $164.3 billion

28. Kentucky: $161.4 billion

29. Oklahoma: $160.5 billion

30. Iowa: $147.2 billion

31. Nevada: $127.5 billion

32. Kansas: $128.5 billion

33. Utah: $116.9 billion

34. Arkansas: $105.8 billion

35. Washington, D.C. (federal district under the authority of the congress): $104.7 billion

36. Mississippi: $98.9 billion

37. Nebraska: $89.6 billion

38. New Mexico: $75.5 billion

39. Hawaii: $68.9 billion

40. West Virginia: $66.6 billion

41.  Delaware: $62.7 billion

42. New Hampshire: $61.6 billion

43. Idaho: $54.8 billion

44. Maine: $53.2 billion

45. Rhode Island: $49.5 billion

46. Alaska: $45.6 billion

47. South Dakota: $39.9 billion

48. Wyoming: $38.2 billion

49. Montana: $37.2 billion

50. North Dakota: $33.4 billion

51. Vermont: $26.4 billion

US Population and Labour Force

The US population for 2010 was 310.282 million. Although the US population is significantly lower compared to India and China, the US has the highest labour force participation rate in the world with 139.396 million employed.

The majority (35.5 percent) of the labour force’s occupations are managerial, professional or technical in nature. A further 24.8 percent hold sales or office jobs, 22.6 percent are in either manufacturing, extraction, transportation and crafts, 0.6 percent are in arming, forestry or fishing, and 16.5 percent have jobs in other services.

Unfortunately, the labour force has yet to recover fully from the 2008 financial crisis. Unemployment rates in the US nearly doubled in 2009 from 5.817 percent to 9.275 percent while 2010 saw a further increase to 9.73 percent.

US Industry Sectors

Agriculture and the industrial sector made up 1.2 percent and 19.6 percent of US’s GDP in 2010 respectively. This percentage can be relatively deceiving. The US is not only the third largest agricultural producer in the world behind China and India, but is also the leading industrial power in the world.

Agriculture is a vital part of US economy and society. According to the last census of agriculture in 2007, there were 2.2 million farms in the US - covering an area of 922 million acres. Farmers are also one of the major political lobbyists in the US as they are primarily responsible for the country’s food demands. Among US agricultural products include wheat, corn, other grains, fruits, vegetables, cotton; beef, pork, poultry, dairy products; fish; and forest products.

The industrial sector on the other hand is highly diversified and technologically advanced; comprising of industries such as petroleum, steel, motor vehicles, aerospace, telecommunications, chemicals, electronics, food processing, consumer goods, lumber and mining.

Finally, services constituted 79.2 percent of the US GDP. Since the 1970s, the US economy has gradually shifted from producing goods to providing services. The large majority of service-providing jobs are found in the group of trade, transportation, and utilities occupations. Other key service industries for the US include finance, tourism and information technology. 

 Read more on about the US economy, including forecasts and trade statistics on EconomyWatch below.