C1b Travel and Tourism

One of the largest service industries in the United States is travel and tourism. In 1997, individual U.S. citizens took 1.3 billion trips within the United States to destinations that were at least 100 miles
(equivalent to 160 km) from home. In increasing numbers, domestic and foreign travelers are visiting theme parks, natural wonders, and points of interest in major cities, and the convention business is booming. New
York City is a popular destination, and tourism is a mainstay of the economies of California, Florida, and Hawaii.

In recent decades, visitors from overseas have become an increasingly important part of the U.S. tourism business. In 1970 about 2.3 million overseas visitors came to the United States, spending $889 million. By
1997 the number of overseas visitors—chiefly from western Europe, Japan,
Latin America, and the Caribbean—was 48 million. Millions of visitors from Canada and Mexico also cross the border every year. Estimated annual expenditures in the United States by Canadian travelers totaled $6 billion, and spending by Mexicans was $5 billion.

America’s historic sites and national parks draw many visitors. In 1998,
287 million visits were made to the more than 350 areas administered by the National Park Service. Millions of people each year visit the national monuments, buildings, and museums in the Washington, D.C., area.
More than 14 million visits are made annually to Golden Gate National
Recreation Area in the San Francisco region. More than 19 million people per year travel on the Blue Ridge Parkway in North Carolina and Virginia, and about 6 million visit the Natchez Trace Parkway in Mississippi,
Alabama, and Tennessee. Located within a day’s drive from most parts of the eastern United States, Great Smoky Mountains National Park is the most popular national park in the United States, receiving nearly 10 million visitors annually.

C1c Transportation

Transportation-related businesses are an important part of the service industry. Trucks, railroads, and ships transport goods to markets across the country. Commercial airlines, railroads, bus companies, and taxis move tourists and commuters to their destinations. The U.S. Postal
Service and a number of private carriers deliver goods as well as mail to consumers. The U.S. transportation network spreads into all sections of the country, but the web of railroads and highways is much denser in the eastern half of the United States, where it serves the nation’s largest urban, industrial, and population concentrations.

As of 1996 the 10 largest railroad companies in the United States operated 72 percent of tracks. Takeovers and mergers among the major private railroad companies were common during the 1980s and 1990s. Amtrak
(the National Railroad Passenger Corporation), a federally subsidized organization, operates almost all the intercity passenger trains in the
United States. It carried 20.2 million passengers in 1997. Although rail passenger travel has declined in importance during the 20th century, some
U.S. cities still maintain extensive subways or commuter railways, including New York City, Washington, D.C., Chicago, and the San Francisco-
Oakland area of California.

During the early decades of the 20th century, motor vehicle transport developed as a serious competitor of the railroads, both for passengers and freight. Federal aid to states for highway construction began with the passage of the Federal-Aid Road Act of 1916.

The federal aid program was greatly expanded in 1956 when the government began an ambitious expansion of the Interstate Highway System, a 74,165- km (46,084-mi) network of limited-access highways that connects the nation’s principal cities. This carefully designed system enables motorists to drive across the country without encountering an intersection or traffic signal. It carries about 20 percent of U.S. motor- vehicle traffic, though it accounts for just over 1 percent of U.S. roads and streets. The system is designed for safe, efficient driving, with gentle curves, easy grades and long sight distances. Entering and exiting the highway system is permitted only at planned interchanges.

Air transport began to compete with other modes of transport in the
United States after World War I (1914-1918). The first commercial flights in the United States were made in 1918 and carried small amounts of mail.
Passenger service began to gain importance in the late 1920s, but air transport did not become a leading mode of travel until the advent of commercial jet craft after World War II. By the 1990s a growing number of
Americans flew for personal and business travel, in part because of the need to cover long distances and in part because they like to get to their destinations quickly. In 1997 airlines in the United States carried
598.1 million passengers, the vast majority of whom were domestic travelers.

By the end of the 20th century, large and small airports across the nation formed a network providing air transportation to individual travelers. The nation had 5,129 public and 13,263 private airports in
1996. The largest airports in the United States by passenger arrivals and departures are William B. Hartsfield International Airport near Atlanta,
Georgia; Chicago-O’Hare International Airport in Illinois; Dallas-Fort
Worth Airport in Texas; and Los Angeles International Airport in
California.

The United States has a relatively small commercial shipping fleet. In
1998 only 473 vessels of 1,000 gross tons and larger were registered in the United States. Only 56 percent were in use; most of the remainder formed part of a government-owned military reserve fleet. However, many
American ship owners register their vessels in foreign countries such as
Liberia and Panama, where crew wages, taxes, and operating costs are lower.

In terms of the number of ships docking, New Orleans, Louisiana, is the busiest port in the nation; each year it handles more than 6,000 vessels.
Other leading ports include Los Angeles-Long Beach, California; Houston,
Texas; New York, New York; San Francisco-Oakland, California; Miami,
Florida; and Philadelphia, Pennsylvania. Crude petroleum accounts for 22 percent of the waterborne tonnage of the United States. Petroleum products make up 18 percent. Coal accounts for 14 percent, and farm products for 14 percent.

The inland waterway network of the United States has three main components—the Mississippi River system, the Great Lakes, and the coastal waterways. Some 66 percent of the annual water freight traffic is on the
Mississippi River and its tributaries, 17 percent is on the Great Lakes, and most of the remainder is on the coastal waterways. A major thoroughfare of the coastal waterways is the Intracoastal Waterway, a navigable, toll-free shipping route extending for about 1,740 km (about
1,080 mi) along the Atlantic Coast and for about 1,770 km (about 1,100 mi) along the Gulf of Mexico coast. About 45 percent of the total annual traffic on all coastal waterways travels on the Gulf Intracoastal
Waterway, about 30 percent is on the Atlantic Intracoastal Waterway, and about 25 percent is on Pacific Coast waterways.

Most goods in the United States travel by railroad and truck, which compete vigorously for freight transport. In 1996, 38 percent of all
United States freight moved by rail and about 27 percent traveled by truck. However, other modes of transportation more easily handle special freight items. An additional 20 percent of all freight, by volume, moved through pipelines, mainly oil and natural gas pipelines originating in
Texas and Louisiana with destinations in the Midwest and Northeast.
Another 16 percent, mainly bulk commodities like coal, grain, and industrial limestone, moved by barge on inland waters.

C1d Government

Federal, state, and local governments provide a sizeable portion of services delivered in the nation. In 1996, government workers made up 4 percent of all workers and together produced 12 percent of GDP.
Government services include items as such Social Security benefits, national defense, education, public welfare programs, law enforcement, and the maintenance of transportation systems, libraries, hospitals, and public parks.

The government sector in the U.S. economy has increased dramatically in size during the 20th century. Federal revenues grew from less than 5 percent of total GDP in the early 1930s to more than 20 percent by the late 1990s. Much of this growth took place during two time periods. In the 1930s, following the economic downturn of the Great Depression, U.S. president Franklin D. Roosevelt instituted sweeping social programs designed to provide basic financial security to individuals and families.
Many of these programs, such as unemployment insurance and Social
Security payments to retirees, have remained in place since then. During the 1960s, U.S. president Lyndon B. Johnson instituted a series of programs designed to fight poverty, promote education, and provide basic medical coverage for less-affluent Americans. In addition, during the last half of the 20th century, government expenditures increased for medical care and national defense as a result of technological advances.
The cost of transportation construction also rose as the growing population demanded more and better highway systems.

C1e Entertainment

Another leading industry is the entertainment business. Motion picture production has been centered in Hollywood, California, since the early decades of the 20th century, when the budding motion picture industry discovered that the warm climate and sunny skies of southern California provided ideal conditions for film production. Other entertainment industries include theater, which tends to be located in larger urban areas, particularly New York City, and television, with major networks operating out of the New York City area. .

C2 Commerce The 1990s have been years of unrivaled prosperity in the United States, with per capita GDP reaching $30,450 by 1998. This high quality of life results partly from a rapid expansion of commerce in the years following World War II.

C2a Domestic Trade

Convenience is the key to consumer markets in the United States, whether it is fast food, movie theaters, clothing, or any of hundreds of different types of consumer goods. Products are being delivered to citizens in a more efficient manner, as industries and business firms have decentralized to more closely fit the distribution of population.
Malls have sprung up in suburban areas, making the downtown department store obsolete in many smaller cities. Manufacturers also market their goods directly to customers in factory outlet malls. Prices are often lower in these outlets than in regular retail stores. Customers often travel hundreds of miles to shop at larger factory outlet malls. At the other end of the spectrum, mail order catalogs and Internet sites have made it possible for many consumers to purchase products directly from companies by mail or using personal computers.

Wholesalers and retailers carry on most domestic commerce, or trade, in the United States. Wholesalers buy goods from producers and sell them mainly to retail business firms. Retailers sell goods to the final consumer. Wholesale and retail trade together account for 16 percent of annual GDP of the United States and employ 21 percent of the labor force.

Wholesale establishments conducted aggregate annual sales of $3.2 trillion in 1992. The leading type of wholesale business is the distribution of groceries and related products, which accounts for 16 percent of all wholesale activity. Next in rank are motor-vehicle parts and supplies; petroleum and petroleum products; professional and commercial equipment, and machinery, equipment, and supplies. Wholesalers tend to be located in large urban centers that enable them to distribute goods over wide sections of the nation. The New York City metropolitan area is the country’s leading wholesale center. It serves as the national distribution center for a variety of goods and as the main regional center for the eastern United States. Other leading wholesale centers include Los Angeles, the main center for the western part of the United
States; Chicago; San Francisco; Philadelphia; Houston; Dallas; and
Atlanta.

In the mid-1990s retail establishments in the United States had aggregate annual sales of $2.2 trillion. Automotive dealers, with 23 percent of the total yearly retail trade, and food stores, with 18 percent, are the leading retailers. The volume of retail sales is directly related to the number of consumers in an area. The four leading states in annual retail sales—California, Texas, Florida, and New York—are also the four most populous states.

C2b Foreign Trade

The United States is the world’s leading trading nation, with total merchandise exports amounting to $683 billion, and imports to $944.6 billion. Despite its massive size, large population, and economic prosperity, the United States economy can provide a higher quality of life for consumers and more opportunity for businesses by trading with other nations. Foreign, or international, trade enables the United States to specialize in producing those goods that it is best suited to make given its available resources. It then imports products that other nations can make more efficiently, lowering prices of these goods for
U.S. consumers.

Nonagricultural products usually account for 90 percent of the yearly value of exports, and agricultural products account for about 10 percent.
Machinery and transportation equipment make up the leading categories of exports, amounting together to one-third of the value of all exports.
Other leading exports include electrical equipment, chemicals, precision instruments, and food products. Beginning in the mid-1970s, the nation’s imports of petroleum from the Middle East and manufactured goods from
Canada and Asia (especially Japan) created a trade imbalance.

D Information and Technology Sector

By the end of the 20th century, many technological innovations had been introduced in the United States. Communications satellites orbited the earth, computers performed day-to-day functions in many businesses, and the Internet provided instant information on most aspects of U.S. life via computer. Developments in communications and technology have transformed many aspects of daily life in the United States, from improvements in kitchen appliances to advances in medical treatment to television broadcasts that are transmitted live via satellite from around the world.

An increasing number of job opportunities are opening in fields related to the research and application of new technology. Entirely new industries have emerged, such as companies that build the equipment used in space explorations. In addition, technology has opened new opportunities for investment and employment in established industries, such as those that manufacture medicines and machines used in the detection and treatment of diseases and individuals who market and sell products via the Internet.

D1 Communications

The communications systems in the United States are among the most developed in the world. Television, radio, newspapers, and other publications, provide most of the country’s news and entertainment. On average there are two radios and one television set for every person in the United States. Although the economic output of the communications industry is relatively small, the industry has enormous importance to the political, social, and intellectual activity of the nation. Most communication media in the United States are privately owned and operate independently of government control.

The Federal Communications Commission must license all radio and television broadcasting stations in the United States. In 1997, 1,285 television broadcasters were in operation. All states had television stations, and more than 40 percent of the stations were concentrated in nine states: Texas, California, Florida, New York, Pennsylvania, Ohio,
Illinois, Michigan, and North Carolina. A rapidly growing number of U.S. households (estimated at 64 million in 1997) subscribed to cable television. An estimated 98.3 percent of U.S. households had at least one television set. Telephone communication changed as cellular phones allowed people to communicate via telephone while away from their homes and businesses or while traveling. There were 69 million cellular phones in use in 1998.

There were 1,489 daily newspapers published in the United States in 1998,
8 fewer than the year before. Daily newspapers had a circulation of approximately 60.1 million copies in 1998. The top daily newspapers in the United States according to circulation were the Wall Street Journal
(published in New York City), USA Today (published in Arlington,
Virginia), the New York Times, and the Los Angeles Times, each with a circulation in excess of 1 million. Other leading newspapers included the
Washington Post, the New York Daily News, the Chicago Tribune, the
Detroit Free Press, the San Francisco Chronicle, the Chicago Sun-Times, the Dallas Morning News, the Boston Globe, and the Philadelphia Inquirer.

Nearly 21,300 periodicals were published in 1997. These ranged from specialized journals reaching only a small number of professionals to major newsmagazines such as Time, with a circulation of 4.1 million a week, and Newsweek, with a circulation of 3.2 million a week. Other mass publications with vast audiences included the weekly TV Guide, reaching
13.2 million readers, and the monthly Reader’s Digest, with a circulation of 15.1 million copies.

D2 Technology

One of the most far-reaching technological advances of the late 20th century took place in the field of computer science. Computers developed from large, cumbersome, and expensive machines to relatively small and affordable devices. The development of the personal computer (PC) in the
1970s made it possible for many individuals to own computers and allowed even small businesses to use computer technology in their operations. The
U.S. Bureau of the Census estimates that jobs in the computer industry are growing at the fastest rate of any employment area, with job openings for computer specialists expected to double from 1996 to 2006.

The Internet began in the 1960s as a small network of academic and government computers primarily involved in research for the U.S. military. Originally limited to researchers at a handful of universities and government facilities, the Internet quickly became a worldwide network providing users with information on a range of subjects and allowing them to purchase goods directly from companies via computer. By
1999, 84 million U.S. citizens had access to the Internet at home or work. More and more Americans were paying bills, shopping, ordering airline tickets, and purchasing stocks via computer over the Internet.

This article was written by Michael Watts, with the exception of the
Chief Goods and Services of the U.S. Economy section, which he reviewed.

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