Beginning in the 1930s, the government of the United States played an increasingly active role in the economy. Even though the U.S. economy in the 1990s was based on free enterprise, the government regulated business in various ways. Some government regulations were drawn up to protect consumers from unsafe products and workers from unsafe working conditions; others were designed to reduce environmental pollution. Government also exerts tremendous influence on the economy through the jobs it provides and the money it spends. Government employs more than 15 percent of all the workers in the nation. The federal budget for fiscal year 1993-1994 included estimated expenditures of $1.48 trillion, or about 22 percent of gross domestic product (GDP)—the value of all goods and services produced. Revenue in 1993-1994 was estimated at $1.25 trillion. That left a deficit for the 1993-1994 fiscal year of about $230 billion. The United States has consistently recorded annual budget deficits of $100 billion or more since the early 1980s. The gross federal debt increased from $908.5 billion in 1980 to an estimated $4.68 trillion in 1994; during the same period, annual interest on the public debt rose from $74.8 billion to $299 billion, or 20 percent of all federal outlays.

In the mid-1990s the United States led all nations of the world in the yearly value of its economic production. The nation's annual GDP was about $6.4 trillion in 1993. With a per-capita GDP of nearly $24,700, the people of the United States had one of the world's highest standards of living.

When the effect of inflation (rising prices) is not considered, GDP has increased at a rather high rate, increasing more than six fold between 1970 and 1993. When the impact of inflation is taken into account, however, the rate of economic growth has been much less. During the period from 1970 to 1993, the annual average change in GDP, based on dollars adjusted for inflation, was 3.4 percent. GDP adjusted for inflation gives a more accurate picture of the performance of the economy than the unadjusted figure.

The U.S. economy consists of three main sectors—the primary, secondary, and tertiary. Primary economic activities are those directly involving the natural environment, including agriculture, forestry, fishing, and mining. The primary sector usually contributes about 4 percent of annual GDP. Secondary economic activities involve processing or combining materials into new products, and include manufacturing and construction. Each year the secondary sector accounts for approximately 23 percent of GDP. Tertiary economic activities involve the output of services rather than goods. Examples of tertiary activities include wholesale and retail trade, banking, government, and transportation. The tertiary is the most important sector by far and accounts for almost 73 percent of annual GDP.

The United States in 1993 had a total employed civilian labor force of about 119.3 million; in addition, about 8.7 million unemployed people were seeking jobs. Efficient technology makes possible a large volume of production with a comparatively small number of employees in the primary and secondary sectors of the economy. Primary occupations in agriculture, forestry, fishing, and mining engage only about 3 percent of the employed population, and secondary occupations in manufacturing and construction employ about 22 percent. The service activities in the large tertiary sector employ about three-quarters of the workers.

Farming accounts for less than 2 percent of annual GDP and employs fewer than 3 percent of U.S. workers. Yet the nation leads the world in many aspects of agricultural production. Farmers not only produce enough to meet domestic needs, they also produce enough to enable the United States to export more farm products per year than any other nation in the world. The total annual value of farm output increased from about $55 billion in 1970 to approximately $187 billion in 1992. Excluding inflation, the increase in the farm output was 2 percent annually.

The small subsistence farm run by a farmer primarily to meet personal needs has virtually disappeared from the American scene. Less than 1 percent of the total farm output by value is consumed by households on the farms where it is produced. Most agricultural products are grown on large commercial farms for shipment to urban and industrial markets.

Increased mechanization and widespread use of scientific farming practices have led to a decrease in the number of farms and farmers and an increase in the size of farms. The number of farms in the United States decreased from more than 5.6 million in 1950 to about 2.1 million in 1993. At the same time, average farm size increased from 86 hectares (213 acres) to 191 hectares (473 acres).

Leading agricultural crops are corn, vegetables, soybeans, fruits and nuts, wheat, cotton, and tobacco. Soybeans are grown primarily in the Midwest, especially in Iowa and Illinois; during the 1970s the cultivation of soybeans expanded rapidly into the lower Mississippi Valley and other parts of the South. Corn is a major crop in many parts of the United States, but most is produced in the Midwest, where it is the main feed for the cattle and hogs raised there. Illinois, Iowa, Nebraska, and Indiana together produce more than half of the annual U.S. corn crop.

Forests cover a little less than a third of the United States, or about 298 million hectares (about 737 million acres). About 198 million hectares (about 490 million acres) produce commercially valuable trees for making lumber, paper, and other wood products. These trees contain about 22 billion cu m (about 786 billion cu ft) of usable wood.

About 73 percent of the commercial forestland is privately owned by farmers, lumber companies, paper mills, and other wood-using industries. The remaining 27 percent is owned by federal, state, and local governments. Approximately 425 million cu m (about 15 billion cu ft) of forest products are produced annually. Softwoods make up about three-fourths of the production, and hardwoods about one-fourth. Nearly half the timber output is used for making lumber, and about one-third is converted to pulpwood, which is subsequently used to manufacture paper. Most of the remaining output goes into plywood and veneer. Douglas fir and southern yellow pine are the primary softwoods used in making lumber, and oak is the most important hardwood.

In the early 1990s the United States had an annual commercial fish catch (excluding most fish raised on farms) of about 4.4 million metric tons, with a value of approximately $3.68 billion. The United States is usually sixth among the nations of the world in weight of total catch, ranking behind China, Russia, Japan, Peru, and Chile. In addition to commercial fishing, sport fishing is popular in many states.

Marine species dominate U.S. commercial landings, with freshwater fish representing only a small portion of the total catch. Shellfish account for only about 15 percent of the weight of the total catch but 45 percent of the value; finfish represent the remaining share of weight and value. Alaskan pollock makes up about one-third of all landings by weight but only 9 percent of the catch by value; menhaden, a species used in the manufacture of oil and fertilizer, accounts for nearly one-fifth of the tonnage landed but only about 2 percent of the value. The most valuable species caught are salmon (16 percent of the total catch value), shrimp (13 percent), and crabs (13 percent). Other important species include scallops, lobster, flounder, Pacific cod, clams, oysters, and tuna.

The United States ranks among world leaders in value of annual mineral production. Mining contributes about 1.9 percent of annual GDP and employs about 0.6 percent of the workers. Although mining accounts for a small share of the nation's economic output, it has been essential to its industrial development. Coal and iron ore are the basis for the steel industry. Steel is fabricated into automobiles, appliances, machinery, and other basic products. Petroleum is refined into gasoline, heating oil, and petrochemicals used to make plastics, paint, pharmaceuticals, and synthetic fibers.

Minerals are produced in all states, but the five leading states of Texas, Louisiana, Alaska, California, and Oklahoma typically account for half of the value of the nation's annual mineral production. Texas alone accounts for more than one-fifth of the value of total U.S. output.

The United States leads all nations in the value of its yearly manufacturing output. About 19 percent of annual gross domestic product is accounted for by manufacturing, which employs about one-sixth of the nation's workers. The total value of manufacturers' shipments in the 1990s was approximately $2.82 trillion annually. Although manufacturing remains a key component of the U.S. economy, it has declined in relative importance since the late 1960s. From 1970 to 1993 the overall number of employees in manufacturing declined from 20.7 million to 19.6 million, while the total U.S. labor force grew by more than 40.6 million people.

Perhaps the most important change in recent decades has been the growth of manufacturing in regions outside the Northeast and North Central regions. The nation's industrial core developed in the Northeast. This core is still the location of the greatest concentration of industry, but it has become relatively less significant than in the past. In the early 1990s about half of the nation's manufacturing employees were found in the 21 Northeast and North Central states that extend from New England to Kansas. In 1947, however, about 75 percent of the manufacturing employees lived in the same region. Since 1947, the South's share of the nation's manufacturing workers has increased from 19 to 32 percent, and the West's share has grown from 7 to 18 percent. Within the North, manufacturing is centered in the Middle Atlantic and East North Central states, which account for about 37 percent of the annual value added by all manufacturing in the United States. Located in this area are five of the top seven manufacturing states—New York, Ohio, Illinois, Pennsylvania, and Michigan—which together are responsible for approximately 27 percent of the value added by manufacturing in all states each year.

The greatest gains in manufacturing in the South have been in Texas, and the most phenomenal growth in the West has been in California, which in the early 1990s was the leading manufacturing state, accounting for over one-tenth of the annual U.S. value added by manufacturing.

Ranked by value of manufacturer's shipments, the leading categories of U.S. manufactured goods are processed foods, transportation equipment, chemicals, industrial machinery, and electronic equipment.

All varieties of industrial machinery, including office and computing equipment, accounted for about 9 percent of the yearly value added by manufacture in the early 1990s. Industrial machinery includes engines, farm equipment, various kinds of construction machinery, office machines, and refrigeration equipment. California led all states in the annual value added by industrial machinery, followed by Illinois, Ohio, and Michigan. Transportation equipment includes passenger cars, trucks, airplanes, space vehicles, ships and boats, and railroad equipment. Michigan, with its huge automobile industry, is a leading producer of transportation equipment. California is a leader in the aerospace industry.

Food processing accounted for about 11 percent of the overall annual value added by manufacture in the early 1990s, and the chemical industry contributed about 12 percent. Texas and Louisiana are leaders in chemical manufacturing. The petroleum and natural gas produced and refined in both states are basic raw materials used in manufacturing many chemical products. Food processing is an important industry in several states noted for the production of food crops and livestock, or both. California has a large fruit- and vegetable-processing industry. Meat packing in Illinois and dairy processing in Wisconsin make both states leaders in food manufacturing.

The manufacture of fabricated metal and primary metal is concentrated in the nation's industrial core region. Iron ore from the Lake Superior district, plus that imported from Canada and other countries, and Appalachian coal are the basis for a huge iron and steel industry. Pennsylvania, Ohio, Indiana, Illinois, and Michigan are leading states in the value of primary metal output. The fabricated metal industry, which includes the manufacture of cans and other containers, hardware, and metal forgings and stampings, is important in the same states. The primary metals industry of these states provides the basic raw materials, especially steel, that are used in making metal products.

The rubber and plastics industry is located mainly in the nation's industrial core region. Ohio, which has a large concentration of tire-manufacturing plants, has long been a leader in this industry.

Printing and publishing is a widespread industry, with newspapers published throughout the country. New York, with its book-publishing industry, is the leading state, but California, Illinois, and Pennsylvania are also important.

Other major U.S. manufactures include textiles, clothing, precision instruments, lumber, furniture, tobacco products, leather goods, and stone, clay, and glass items.

The energy to power the U.S. economy is derived from various sources. Measured in terms of heat-producing capacity (British thermal units, or Btu), petroleum provides about 40 percent of the total energy consumed in the United States. It supplies about 97 percent of the energy used to power the nation's transportation system, and it is used to heat millions of houses and factories.

Natural gas is the source of about 25 percent of the energy consumed. Many industrial plants use natural gas for heat and power, and several million households burn it for heating and cooking. Coal provides about 23 percent of the energy consumed. Its major uses are in the generation of electricity, which uses more than three-fourths of all the coal consumed, and in the manufacture of steel.

Water power generates about 4 percent and nuclear power about 8 percent of the nation's energy. Both are employed mainly to produce electricity for residential and industrial use. Nuclear energy has been viewed as an important alternative to expensive petroleum and natural gas, but its development has proceeded somewhat more slowly than originally anticipated. People are reluctant to live near nuclear plants for fear of a possible radiation-releasing accident. Another obstacle to the expansion of nuclear power use is that satisfactory ways of disposing of radioactive wastes have not been devised.

For many years, petroleum appeared abundant and cheap, and it became the basis for an American life-style based on extensive use of the private automobile. Since 1947, when the United States became a net importer of oil, annual domestic production has not been enough to meet the demands of the highly mobile American society.

The development of transportation facilities was of crucial importance in the growth of the United States. The first routes of travel were natural waterways; the earliest overland routes were rough trails suitable for travel on foot or horseback. No surfaced roads existed until the 1790s, when the first turnpikes were built, some under private auspices and some by state government. Besides the overland roads, many canals were constructed between the late 18th century and 1850 to link navigable rivers and lakes in the eastern United States and in the Great Lakes region. Steam railroads began to appear in the East in the 1820s. The first transcontinental railroad was constructed between 1862 and 1869 by the Union Pacific and Central Pacific companies, both of which received large subsidies from the federal government. Transcontinental railroads were the chief means of transportation used by European settlers who populated the West in the latter part of the 19th century and were also of utmost importance for moving goods from one part of the country to another. The railroads continued to expand until 1917, when the length of operated track reached a peak of about 407,165 km (about 253,000 mi). Thereafter, motor transport became a serious competitor of the railroads both for passengers and freight.

Air transport began to compete with other modes of transport in the United States after World War I. The first commercial flights in the United States were made in 1918 and carried mail. Passenger service began to gain importance in the late 1920s, but not until the advent of commercial jet craft after World War II did air transport become a leading mode of travel.

During the early 1990s railroads annually handled 37.4 percent of the total freight traffic; trucks carried 27.6 percent of the freight, and oil pipelines conveyed 19.3 percent. Some 15.3 percent was shipped on inland waterways. Although the freight handled by airlines amounted to only 0.4 percent of the total, much of the cargo consisted of high-priority or high-value items.

Private automobiles accounted for about 81 percent of the total annual passenger traffic carried by the various modes of transportation. Airlines were the second leading mover of people, carrying nearly 18 percent of the passenger traffic. Buses were responsible for 1.1 percent, and railroads carried 0.7 percent of passenger traffic.

The transportation network spreads into all sections of the country, but the web of railroads and highways is much more dense in the eastern half of the United States, where it serves the nation's largest urban and industrial concentrations.

In the early 1990s the United States had about 6.28 million km (about 3.90 million mi) of streets, roads, and highways. About 20 percent of the roadways were in urban areas. The National Interstate Highway System, 73,212 km (45,493 mi) in length in the early 1990s, connected the nation's principal cities and carried nearly one-quarter of all the road and street traffic in the United States. Texas had the longest road system by far; California, Illinois, Kansas, Minnesota, and Missouri also had lengthy road networks.

More than 194 million motor vehicles were registered in the United States in the early 1990s. Nearly three-fourths were automobiles—more than one for every two persons in the country. About one-fifth of the vehicles were trucks. California had the most registered motor vehicles by far, followed by Texas, Florida, New York, Ohio, Illinois, and Pennsylvania.

As of 1992, Class I railroads—the 13 largest railroad companies in the United States—operated 74 percent of the total trackage, employed 89 percent of the railroad workers, and generated 91 percent of the railroad revenue. Overall, the United States had 241,955 km (150,348 mi) of operated railroad track. Texas, Illinois, California, and Kansas had the most trackage. Railroads employ about 223,000 people and transport nearly 25 million cars of freight each year. Amtrak (the National Railroad Passenger Corporation), a federally subsidized concern, operates almost all the intercity passenger trains in the United States; it carried more than 51 million passengers annually in the early 1990s, including some 29 million metropolitan commuters. Takeovers and mergers among the major private railroad companies were common during the 1980s and early 1990s.

The United States has a relatively small merchant marine. Only about 600 vessels of 1000 gross tons and up are registered in the United States, of which only about 330 are privately owned. Many American shipowners register their ships in foreign countries such as Liberia and Panama, however, so they can operate the ship at a lower cost by, for instance, paying lower wages to the crews.

Airlines in the United States annually carry more than 473 million passengers, the vast majority of whom are domestic travelers. The nation has about 5100 public and 12,700 private airports. Among the busiest are Chicago-O'Hare International Airport; Dallas/Fort Worth Airport, in Texas; William B. Hartsfield International Airport, near Atlanta, Georgia; Los Angeles International Airport; and San Francisco International Airport. The nation's newest major airport, Denver International Airport, opened in 1995, supplanting Stapleton International Airport, which had been the sixth busiest in the United States. Deregulation of the domestic air transport industry in the early 1980s led to fare wars, mergers, and takeovers, as competition by the major carriers for high-density passenger markets grew increasingly intense.

Nearly 11,200 periodicals were published in the early 1990s. These ranged from specialized journals reaching only a small number of professionals to major newsmagazines such as Newsweek, with a circulation of about 3.2 million a week, and Time, with a circulation of about 4.2 million a week; to mass publications with vast audiences, such as the weekly TV Guide, reaching 14.9 million readers, and the monthly Reader's Digest, with a circulation in excess of 16.3 million copies. In 1992 about 49,300 new books were published; the leading categories were sociology and economics, juvenile, and fiction. About 2 billion books were sold.

Coins are made in six denominations—the penny, or 1ў; the nickel, or 5ў; the dime, or 10ў; the quarter, or 25ў; the half-dollar, or 50ў; and the dollar, or 100ў. Federal Reserve notes are issued in six denominations—$1, $5, $10, $20, $50, and $100. Denominations of $500, $1000, $5000, and $10,000 were discontinued in 1969, and $2 bills were stopped in 1976; however, some of these notes remain in circulation. In 1993 the basic U.S. money supply, including currency and funds in checking accounts, was nearly $1.13 trillion.

In 1993 the United States had 10,957 insured banks with a total of nearly 67,800 banking offices. Due to mergers and closures, the number of banks steadily declined in the 1980s and early 1990s while the number of bank offices increased. Combined assets were approximately $3.71 trillion. Banks in the United States are chartered under the laws of either a state or the federal government. State-chartered banks are regulated by officials of the state in which they are located. National banks are under the supervision of the Office of the Comptroller of the Currency.

The Federal Reserve System, created by the Federal Reserve Act of 1913, is the central banking organization of the United States. All national banks are required by law to belong to the Federal Reserve System. State banks may voluntarily become members if they meet certain requirements. Each member bank operates within the district of 1 of the 12 Federal Reserve banks. About 60 percent of all commercial banking offices belong to banks affiliated with the Federal Reserve System.

In the early 1990s the United States had about 2260 savings and loan associations (SLAs), with combined assets of more than $1 trillion. The industry was overhauled in the late 1980s and early 1990s after many SLAs became insolvent.

Most domestic commerce, or trade, in the United States is carried on by wholesalers and retailers. Wholesalers buy goods from producers and sell them mainly to retail business firms. Retailers sell goods to the final consumer. Wholesale and retail trade together account for about 16 percent of annual GDP of the United States and employ about 20 percent of the labor force.

In the early 1990s the United States had about 478,000 wholesale establishments, which together registered sales of more than $1.9 trillion. The distribution of groceries and related products, the leading type of wholesale business, had annual sales of about $290 billion, or some 15 percent of all wholesale activity. Next in rank were machinery, equipment, and supplies; motor-vehicle parts and supplies; professional and commercial equipment, and electrical goods.

In the late 1980s the United States had over 1.5 million retail establishments with aggregate annual sales of nearly $2.1 trillion. Automotive dealers, with about 22 percent of the total yearly retail trade, and food stores, with about 19 percent, are the leading retailers. Other major types of retail business include those involving sales of clothing; meals and snacks; automotive fuels, lubricants, and supplies; lumber and other building materials; pharmaceuticals and cosmetics; and furniture and sleep equipment.

Foreign, or international, trade enables the United States to specialize in producing those goods it is best suited to make from its available resources. The United States is the world's leading trading nation, with an annual trade volume of more than $1 trillion in the early 1990s. Total merchandise exports in 1993 amounted to $465 billion, and imports to $581 billion. Beginning in the mid-1970s, the nation's imports of expensive foreign petroleum and of manufactured goods from Canada and Asia (especially Japan) created a trade imbalance. From 1984 through 1990 the annual merchandise trade deficit regularly exceeded $100 billion.

Nonagricultural products usually account for approximately 90 percent of the yearly value of exports and agricultural products for about 10 percent. Machinery and transportation equipment make up the leading categories of exports, amounting together to over 40 percent of the value of all exports. Other leading exports include manufactured goods, such as textiles and iron and steel; processed foods; inedible crude materials, such as cotton, soybeans, and metal ores; chemicals; and mineral fuels and lubricants.

Canada and Japan are the country's most important trade partners; they provide the markets for about 32 percent of total annual U.S. exports and are the source of about 38 percent of the nation's imports. Chief trading partners for exports are Mexico, Germany, Great Britain, Taiwan, South Korea, France, the Netherlands, and Singapore; chief trading partners for imports are Mexico, China, Germany, Taiwan, Great Britain, South Korea, France, Italy, Singapore, and Malaysia. Leading sources of U.S. petroleum imports are Saudi Arabia, Venezuela, Canada, Mexico, and Nigeria.

In recent decades visitors from overseas have become an increasingly important part of the U.S. tourist business. In 1970 about 2.3 million overseas visitors came to the United States, spending approximately $889 million. By 1993 the number of overseas visitors—chiefly from western Europe, Japan, Latin America, and the Caribbean—was an estimated 45.7 million, and their expenditures had risen to more than $56.5 billion. Millions of visitors from Canada and Mexico cross the border every year; expenditures in the United States by Canadian travelers totaled $8 billion in 1992, and spending by Mexicans was $5.8 billion.

Each year Americans take more than 1.3 billion person-trips to destinations within the United States. (A person-trip is one person making one trip to a destination at least 161 km/100 mi from home.) New York City is a popular destination among both domestic and foreign travelers, and tourism is a mainstay of the economies of California and Florida.