Japan is the world's second largest economy after the United States. In 2003 Japan's gross domestic product (GDP) was $4.30 trillion, compared to $10.95 trillion for the United States. Japan also has one of the world's highest living standards. Economists compare living standards in different countries using a measure called purchasing power parity. This measure takes into account the countries' differing costs of living. By this measure, Japan's per capita GDP rose from 21 percent of the U.S. level in 1955 to 56 percent in 1970. By 1992 per capita GDP had reached $19,920, 86 percent of the U.S. level. Despite the overall strength of the Japanese economy, in the late 1990s Japan was mired in its longest recession since World War II. GDP, which had grown slowly in the early 1990s, fell 0.4 percent in 1997 and another 2.8 percent in 1998. This was the first time in the post-war era that Japan's GDP declined two years in a row.
As is typical in a mature economy, services make up the largest part of Japan's economy. In 2002 services (such as trade, government, and real estate) accounted for 68 percent of Japan's GDP, while industry (mining, manufacturing, and construction) made up 30 percent, and agriculture (including forestry and fishing) contributed 1 percent.