largest among major industrial nations. In this
market-oriented economy, private individuals and business firms make
most of the decisions, and government purchases of goods and
services are made predominantly in the marketplace. US business
firms enjoy considerably greater flexibility than their counterparts
in Western Europe and Japan in decisions to expand capital plant,
lay off surplus workers, and develop new products. At the same time,
they face higher barriers to entry in their rivals' home markets
than the barriers to entry of foreign firms in US markets. In all
economic sectors, US firms are at or near the forefront in
technological advances, especially in computers, medical equipment,
and aerospace, although their advantage has steadily narrowed since
the end of World War II. The onrush of technology largely explains
the gradual development of a "two-tier labor market" in which those
at the bottom lack the education and professional/technical skills
of those at the top and, more and more, fail to get pay raises,
health insurance coverage, and other benefits. The years 1994-95
witnessed moderate gains in real output, low inflation rates, and a
drop in unemployment below 6%. The capture of both houses of
Congress by the Republicans in the elections of 8 November 1994 has
intensified the debate over how the US should address its major
economic problems. These problems include inadequate investment in
economic infrastructure, rapidly rising medical costs of an aging
population, sizable budget and trade deficits, and stagnation of
family income in the lower economic groups. The outlook for 1996 is
for continued moderate growth, low inflation, and about the same
level of unemployment.

GDP: purchasing power parity - $7.2477 trillion (1995 est.)

GDP real growth rate: 2.1% (1995 est.)

GDP per capita: $27,500 (1995 est.)

GDP composition by sector:
agriculture: 2%
industry: 23%
services: 75% (1995 est.)

Inflation rate (consumer prices): 2.5% (1995)

Labor force: 132.304 million (includes unemployed) (1995)
by occupation: managerial and professional 28.3%, technical, sales
and administrative support 30.0%, services 13.5%, manufacturing,
mining, transportation, and crafts 25.3%, farming, forestry, and
fishing 2.8%

Unemployment rate: 5.6% (December 1995)

Budget:
revenues: $1.258 trillion
expenditures: $1.461 trillion, including capita