Alexander Fishkov, Ph.D. student Computer Science
Gross domestic product is commonly used to measure the economic performance of a country. GDP equals the value of all the goods and services produced in the economy minus the value of any goods or services used during the production process. Another name for this quantity is “value added.” Recently, the Bureau of Economic Analysis released data on GDP by industry for 2016. Today we will look at this data to see different industries’ contributions to the U.S. economy’s growth in the last year.
The GDP of the U.S. has been growing over the last two decades, with an exception during the economic crisis of 2008. By 2011, it already exceeded pre-crisis values, and now the GDP of the U.S. amounts to $16.6 trillion. The GDP’s growth rate was 1.6 percent in 2016, a decline from the previous year’s 2.8 percent increase.
In the chart above, we present the highest and lowest growing industries in terms of real value added. Agriculture and information technology experienced the largest growth, with the former increasing by 8 percent. Information technology increased by 6.4 percent following the previous year’s 7.5 percent increase. Education Services saw the smallest growth (or rather, the largest decrease) in 2016: this sector declined by 0.8 percent in real value added after a very small increase of 0.2 percent in 2015.
Due to the different sizes of each industry, their contributions to the national real GDP growth display different dynamics compared to their individual growth. Information technology led the increase in the real GDP of the United States, providing 0.29 percent of last year’s 1.6 percent GDP growth. This largely stems from the growth of the broadcasting and telecommunications sub-industry. Next is the professional services industry, which provided 0.24 percent of the GDP increase. The health care and social assistance industry contributed 0.21 percent to the national GDP growth in 2016. This increase was largely fueled by the ambulatory health care services sub-industry.
The manufacturing industry exhibited a negative contribution to the real GDP last year, providing a 0.02 percent decrease. This is in contrast to the preceding year’s 0.19 percent (positive) contribution by the mining industry to the growth of the GDP. Educational services also produced a negative impact on the national GDP — a decrease of 0.01 percent in 2016. Previously, in 2015, this industry showed close to zero contribution to the economic growth.
About Alexander Fishkov
Alexander Fishkov, Ph.D. student Computer Science
Alexander is a Ph.D. student in Computer Science. He currently holds B.S. and M.S. degrees in Applied Math. He has experience working for industry major companies performing research in the fields of machine learning, data mining and natural language processing. In his free time, Alexander enjoys hiking, Nordic skiing and traveling.
Other posts by Alexander Fishkov: