The GDP of the United States is 27.37 trillion US dollars, and the gap has widened by nearly 9.5 trillion US dollars.

The GDP gap has widened from $5.77 trillion two years ago to $9.48 trillion, and the United States is going to rejoice.

The U.S. Department of Commerce released economic data for 2023, with GDP reaching $27.37 trillion, a year-on-year increase of 2.5% after excluding price factors.

Compared with 2022, GDP has increased by 1.65 trillion US dollars, equivalent to the GDP of South Korea, and the growth rate has also increased by 0.6 percentage points. In 2023, instead of a recession, the U.S. economy will usher in strong growth.

Previously, the mainland had released economic data for 2023, with a GDP of 126.06 trillion yuan, a year-on-year increase of 5.2%. But the GDP converted into dollars was not announced, and at the average exchange rate for the whole year, the mainland's GDP was $17.89 trillion.

Based on this calculation, the GDP of the United States is 9.48 trillion US dollars higher than that of China, and China's GDP is equivalent to 65.36% of that of the United States, and the gap is further widened.

The mainland's GDP growth rate is obviously more than twice that of the United States, so why is the gap between the two countries widening? There are two reasons for this.

The first is the exchange rate, the mainland's GDP increased by 5.59 trillion yuan in 2023, but after converting to US dollars, the GDP in 2023 is 0.07 trillion US dollars less than in 2022, due to the depreciation of the yuan by 4.55% in 2023.

The second is prices, and the GDP announced by China and the United States is nominal GDP, but the growth rate is real rather than nominal. The nominal growth rate is to add the price factor, because the United States is inflationary, and the mainland is on the verge of deflation, so the nominal growth rate of the United States is much higher than that of the mainland, which is the reason for their GDP growth sharply.

We should look at the widening gap between the GDP of the two countries rationally, after all, the exchange rate and prices are fluctuating and can be reversed at any time, and the most important thing is the economic growth of the local currency.

After the epidemic, the United States started the most aggressive interest rate hike in 40 years, and according to the past situation, once the currency tightened, the American economy would fall into recession due to the sudden brake. This time, however, instead of a recession, the U.S. economy has seen strong growth.

It is really unbelievable that the US economic growth is so strong, what is supporting it? Judging from the released data, consumption is the most important factor supporting the US economic growth.

In the past few years, the United States has been sending money to the people, and during the Trump era, hundreds of trillions were printed. According to Caixin data, in August 2021, U.S. consumers instead accumulated $210 million in excess savings.

In 2019, the size of the U.S. debt was $23 trillion, which exceeded $30 trillion in 2022 and increased to $34 trillion in 2023, which means that in the past four years, the U.S. debt has been issued by an additional $11 trillion. So much money, a lot of it has been used to subsidize enterprises and people.

In the third quarter of 2023, the annualized growth rate of GDP in the United States was as high as 4.9%, of which consumption alone contributed 2.69%. Consumption remained strong in the fourth quarter, with GDP growing at an annualized rate of 3.3% quarter-on-quarter, and personal consumption expenditures, which account for about 80% of the U.S. economy, growing by 2.8%, remain the most important factor supporting growth.

Data released by the University of Michigan showed that from November last year to January this year, the U.S. consumer confidence index soared by nearly 30%, the fastest growth rate since the 1990s. The recovery in consumer confidence has supported strong consumption in the United States. In December, U.S. retail and food service sales surged 5.6% year-on-year, and retail sales for the full year of 2023 also grew by 3.2% year-on-year.

The consumption habits of the American people are different from ours, and they are willing to spend as long as they have money in their hands. Therefore, direct distribution of money can stimulate consumption very well, thereby promoting economic growth.

Driven by strong consumption, the United States will increase by 2.1%, 2.5%, 2.8%, and 3.1% year-on-year in the four quarters of 2023, respectively, and the growth rate has been rising. The GDP is 6.55 trillion US dollars, 6.8 trillion US dollars, 6.93 trillion US dollars, and 7.09 trillion US dollars, respectively, and the GDP of any quarter is beating that of Japan, Germany, and India.

For an economy, the greater the contribution of consumption, the less dependent it is on foreign countries. The U.S. economy has maintained growth despite its perennial trade deficit, and the reason is that consumption is the biggest support. The mainland is the world's factory, which produces a large number of commodities every year, and cannot consume them themselves, so they can only export overseas, so there is a trade surplus of hundreds of billions of dollars every year.

In 2023, final consumption expenditure will contribute 82.5% to the mainland's economy, a record high. In previous years, the contribution rate was about 60%, and if it can be maintained at more than 80% for a long time, then even if external demand is insufficient, our economy can still maintain good growth.

For the economy in 2024, the United Nations forecasts growth of 4.7% in China and 1.4% in the United States. The World Bank forecasts that China will grow by 4.6 percent and the United States by 1.6 percent, both of which are about three times the growth rate of the United States. There is no doubt that China's economic growth rate in 2024 will still be among the highest among the world's major economies.