The US’s Gross Domestic Product has been a key economic indicator, showing the country’s economic growth rates and development. The country has had an average quarterly GDP growth rate of 3.30%, from 1947 to 2010. The country has experienced tremendous growth over the years, exemplified by the high standards of living. However, in the recent past, the economy has undergone a great decline due to the global economic crisis of 2007 to 2010, and whose effects still pervade the economy. In spite of this the country’s economy has improved with records of growth in the first and second quarter of 2011. This trend in GDP growth is further expected to continue into the near future.
Economic recession caused the US economy to suffer declines after continuing with remarkable growth even after the onset of the economic crisis. GDP was recorded as 3.0% in the first quarter of 2008. The second quarter of the same year recorded a negative growth of -1% which slumped further to -4% in the third quarter. In like manner, local industries and businesses underwent gradual economic challenges as further deterioration was experienced with the national GDP calculated at -7% in the first quarter of 2010. In spite of having hit such lows, gradual growth in the following quarters saw the economy recover from with gradual development to attain a GDP growth rate of 5% in the first quarter of 2010.
The first quarter of 2011 saw the GDP grow by 0.4% with further growth into the second quarter. This has been attributed to positive results from various sectors and their input in the nations’ economy. As detailed by economic analysts, the growth in GDP has resulted from positive contributions experienced from “non-residential fixed investments, private inventory investment, and increase in exports” . Spending by Federal government further contributed to growth, which was however, counterbalanced by negative contributions from the country’s local and state governments and their economies. US economy has been further buoyed by reduction in imports and rise in “nonresidential fixed investment” which in part were largely offset by notable decrease in “personal consumption expenditures” . The local economy has further experienced growth in line with the country’s development with improvement enhanced by financial input from the federal treasury.
Considerable growths in the second quarter with statistics from the US Departments of commerce’s Bureau of Economic analysis outlining real personal consumption expenditures as having increased by 0.1% in addition to the increase of 2.1 in the first quarter. The services sector experienced a growth of 0.8% in both quarter, indicative of increased direct investments mainly by the private sector. Goods and services revealed real growth of 7.9% in the first quarter followed by 6.0% increase in the second quarter. This was buoyed up by considerable growth in real imports of 1.3% in the second quarter and 8.3 in the first quarter. Personal income was found to have increased by 0.3% in both quarters. According to the Bureau of Economic Analysis, the rising trend of the country’s GDP this half of the year points out towards further growth in light of similar economic conditions.
Forecasted economic growth of the country’s GDP and its components points out to additional growth into the near future. Using the income approach in determining GDP reveal positive expectation as indicated by the rises in personal income level. The fact that the US economy is market oriented economy raises the profile of the business entities, their organizations as well as the corporate sector. Economic forecasts project additional growth in real GDP in the rest of the year, augmenting growth in local economies as well.