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How Big is the American Economy?

Globe - How Big is the American Economy?

What Makes America Such a Big Deal?

As a long-term resident in the United States, I often chat with friends from other countries. Most of them share one complaint about America. Whether they are from Israel or Australia, Iran or Argentina, a common gripe of theirs is why does the U.S. act like it is the center of the world? Or more specifically why does so much news coverage center around the U.S.?

Are Americans as egocentric as the question implies? Well, yes and no. I won’t comment on individual personalities, which of course cover a broad range. But let’s break down two reasons why people might make opposite conclusions about the influence of America. 

The case against has to do with size of the population and area, the case in favor has to do with the economy.

Population & Size

One argument against the U.S. being so important is that the U.S. population is 332 million, which is significant, but hardly the center of the world. The world’s population is 7.9 billion, and 4.2% of that is in America. The U.S. ranks third in the world, which is not bad, but pales in comparison to some other nations. 

The combined 2.8 billion people in China and India make up 35.5% of the world’s population, over 8.5 times that of America’s population.

Europe has a total of 748 million people, more than double that of the U.S.

In terms of geography, America does have a lot of size too. The U.S. comes in at #3 or #4 depending on who’s counting. With somewhere around 3.7 million square miles, it’s still behind Canada and Russia, and depending on how it’s calculated and how much water is counted, it’s either a little bigger or a little smaller than China. The U.S claims about 6% of the world’s land. 

Pretty impressive, but if you just factored in population and land, it wouldn’t put the U.S. at the forefront of the world.

So why is America such a big deal?

The U.S. Economy is Number One

The Top 10 economies in the world

The Top 10 economies in the world

Economics affects everyone’s life, whether they care about it or not. So let’s dive in for some fun facts.

The United States of America has the largest and most complex economy in the world.

The U.S. is economy is so huge, it’s over 12 times larger than the #10 economy in the world — South Korea.

Here’s another way to look at it — there are only 17 countries other than the U.S. with a gross domestic product (GDP) of more than $1 trillion. The U.S. has a GDP of over $22 trillion. 

China and India have the #2 and #6 economies in the world, and they are growing faster than the U.S. However, the American economy is still 15% larger than their combined economies, even though they have 8.5 times more people.

The U.S. economy is 33.9% larger than the EU. The European Union, if considered as a single entity, had a 2021 GDP of 17.1 trillion.

And just to be clear, this doesn’t exactly match the population figures I listed for Europe (above). The United Kingdom, which left the EU in 2020, as well as 20 other countries with some or all of their land on the European continent, are not members of the EU or part of this GDP figure.

Africa is one of the fastest growing areas as regards to population and economy. Africa is home to over 1.3 billion people, or about 4 times the size of the U.S. population.

How does the U.S. compare to the economies of the 55 countries of Africa? Led by Nigeria, South Africa and Egypt, the GDP of the African continent is just under 2.7 trillion. The U.S. economy is still 8.5 times larger than the rapidly developing continent.

Where the Data Comes From

Several large international bodies track the size of economies around the world. And in fact, they track the size of economies using the U.S. Dollar. This includes the International Monetary Fund (IMF), the World Bank and the United Nations (UN). In this piece, I almost exclusively use figures from the IMF’s October 2021 World Economic Outlook estimates. This was not available for a few countries, and in this case I used the UN’s 2020 figures.

In this report, countries are sorted by nominal GDP estimates from financial and statistical institutions, which are calculated at market or government official exchange rates. It’s called nominal GDP because the numbers don’t take into account differences in the cost of living in different countries, and the results can vary greatly from one year to another based on fluctuations in the exchange rates of the country’s currency.

How The U.S. Compares to the Rest of the Americas

GDP of the Americas
Treemap of the GDP of 30 Countries in the America’s

How big is the U.S. economy compared to the rest of North and South America? It’s gigantic. 

If you added the economy of every country in the America’s, and included the Caribbean and the island Greenland, they would all still be much smaller than the U.S. These figures even consider Puerto Rico, a U.S. territory and the 10th largest economy in the America’s, as a separate figure.

The U.S. economy is three times bigger than the 29 next largest economies in the Americas. 

The next largest economies by GDP are Canada (#9 worldwide), Brazil (#12) and Mexico (#15). These three countries are the only other economies in the New World with greater than a trillion dollar economy. The next largest, Argentina, has a GDP of $455 billion, 31st in the world. 

American Companies

home computer showing graph

How do some of the largest American companies measure up?

Apple, America’s most valuable corporation, recorded a 2021 revenue of $365 billion. If it were a country, and revenue was GDP Apple would rank #42 in the world. In the America’s, only Canada, Brazil, Mexico and Argentina have a higher GDP.

Next, take the U.S. company producing the largest gross revenue. Walmart, whose stock is less valuable than Apple, had an even larger gross revenue in 2021 — hitting $523 billion. This figure would make Walmart the 27th largest economy in the world, slightly larger than Ireland. 

Amazon ($280 billion) and CVS Health ($256 billion) would come in at a respectable #47 and #49, just above Pakistan and Portugal.

How Do U.S. States Measure Up?

GDP in Millions - US States

Using estimates from the U.S. Bureau of Economic Analysis (BEA), we were able to see how U.S. States compare. 

If it were a country, California would have the 5th largest economy in the world — larger than all 55 African nations combined.

As their own country, Texas and New York would each individually come in at #10, just behind Canada and just ahead of South Korea.

Florida would come in at #16, just behind Mexico and right ahead of Indonesia.

Illinois, which just missed the $1 trillion mark would come in 19th place, just behind the Netherlands and one spot above Saudi Arabia. 

The smallest State economy is Vermont which came in at $36.6 billion. If it was a country, it would rank 100th place, just above the median, out of 206 countries and territories listed by the UN. Paraguay would be right above Vermont and Estonia right below it.

The District of Columbia had a GDP of just under $154 billion and came behind 33 U.S. States. If it were a country, it would come in at 59th place, behind Algeria and ahead of Kuwait.

The U.S. Territory of Puerto Rico is the #2 economy of the Caribbean, just behind Cuba, and is the 64th largest economy in the world. 

The next largest economy of a U.S. Territory is Guam. With an economy of $5.8 billion in 2020, it came in at 161st in the world, behind the Cayman Islands and ahead of French Polynesia.

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This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. The author of this article may hold assets mentioned in the piece.

Author

Alexandre Lores is a personal finance writer from Tampa Bay, Florida, with the goal to help one million people achieve financial freedom. He has spent over five years studying markets and economics, finding Bitcoin in 2017 and never turning back. He frequently appears on TV and in online news articles and is a regular Twitter spaces host.

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