The US economy — what America actually earns from

Services dominate. Professional and business services, health care and social assistance, finance and insurance, real estate, information technology, retail and government together account for roughly four fifths of gross domestic product and a similar share of employment.

Health care alone is around 17 percent of GDP — far higher than any other wealthy country, and the single largest employing sector. That figure is simultaneously a measure of the industry's size and of the system's cost.

Technology is the sector with outsized global influence relative to its share of employment. The largest American technology companies are among the most valuable in the world, and the US retains a dominant position in software, semiconductors design, cloud infrastructure and artificial intelligence.

Manufacturing is around 10 percent of GDP, down sharply from mid-century, but the absolute output remains enormous — the US is the world's second-largest manufacturer after China, concentrated in aerospace, pharmaceuticals, medical devices, industrial machinery, chemicals and automobiles.

Agriculture is under 1 percent of GDP but of outsized strategic importance: the US is among the world's largest exporters of corn, soybeans, wheat, beef and cotton.

Energy is the quieter transformation. Shale extraction made the United States the world's largest producer of both oil and natural gas, reversing decades of import dependence.

The US dollar is the world's primary reserve currency, accounting for roughly 58 percent of allocated foreign exchange reserves and the majority of international trade invoicing and cross-border lending.

This gives the United States an advantage no other country has: it can borrow enormous sums in its own currency at low cost, because global demand for dollar assets is structural rather than discretionary. Economists sometimes call it an exorbitant privilege.

It also means US monetary policy is global monetary policy. When the Federal Reserve raises rates, capital flows toward dollar assets and away from emerging markets, and dollar-denominated debt elsewhere becomes harder to service. Decisions made for domestic reasons have worldwide effects.

The Fed itself has a dual mandate set by Congress — maximum employment and stable prices — which distinguishes it from central banks with an inflation target alone. It targets 2 percent inflation over the longer run and sets the federal funds rate through the Federal Open Market Committee.

The federal government raises most revenue from individual income tax and payroll taxes, with corporate income tax a much smaller share. There is no federal sales tax or VAT — the US is the only large developed economy without one.

Federal income tax is progressive, with seven brackets running from 10 percent to 37 percent, applied marginally so only income within each band is taxed at that rate. The standard deduction, which most filers take, removes a substantial first slice of income from tax entirely.

Payroll taxes fund Social Security and Medicare. Employees and employers each pay 6.2 percent for Social Security up to an annual wage cap, and 1.45 percent for Medicare with no cap, plus an additional Medicare tax on high earners. Self-employed people pay both halves.

State taxes vary enormously. Nine states levy no broad personal income tax; California's top rate exceeds 13 percent. Sales tax is state and local, added at the register rather than shown on the shelf price, and five states have no statewide sales tax.

Property tax funds most local government and schools, is assessed locally, and varies more than any other American tax — from under 0.3 percent of value in Hawaii to over 2 percent in New Jersey and Illinois.

Because rates and thresholds are inflation-adjusted annually, this page deliberately avoids quoting specific figures — check IRS.gov.

Health care costs are the dominant structural issue. The US spends roughly twice the OECD average per person on health care and achieves outcomes at or below the average on life expectancy, infant mortality and preventable mortality. Every serious analysis identifies prices rather than utilization as the main driver — Americans do not consume more care, they pay more for each unit of it.

Inequality is higher than in any other major developed economy on standard measures, and wealth is more concentrated than income. Real wages for lower-earning workers stagnated for much of the period from the 1970s to the 2010s before rising more strongly in the tight labor market of the 2020s.

Housing affordability has become a national issue rather than a coastal one, driven principally by a shortfall in construction relative to household formation that accumulated after the 2008 financial crisis, plus local zoning that restricts density.

Federal debt held by the public has risen substantially as a share of GDP, and the Congressional Budget Office projects it continuing to rise on current policy, driven mainly by Social Security, Medicare and interest costs as the population ages.

Labor market dynamism — the rate at which jobs and firms are created and destroyed — has declined over decades, which economists link to slower productivity growth even as headline employment has been strong.