There was some good and bad news on the economic front today. Businesses hired in November at their strongest pace in nearly three years. 

But according to new figures from the International Monetary Fund, China's economy is now the largest in the world, dropping the U.S. to #2. 

It's the first time since Ulysses S. Grant was president (the 1870s) that the U.S. economy has not been the world's largest.

More details from from MarketWatch:

The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.

As recently as 2000, we produced nearly three times as much as the Chinese.

To put the numbers slightly differently, China now accounts for 16.5% of the global economy when measured in real purchasing-power terms, compared with 16.3% for the U.S.

This latest economic earthquake follows the development last year when China surpassed the U.S. for the first time in terms of global trade.

The "Outnumbered" panel weighed in this morning on the reasons for the slide. Harris Faulkner cited declining buying power combined with the fact that the U.S. doesn't produce as much as it used to. 

Andrea Tantaros said it's getting harder and harder for people to start small businesses because of over-regulation. 

"I have friends right now in New York trying to start a small business. They say it's literally impossible because all of the rules and regulations, the hiring procedures, and they can't afford the health care," she said.

Kirsten Powers said she's not sure that regulations are to blame, but believes uncertainty about ObamaCare and a lack of action by Congress are contributing factors.

Tucker Carlson noted that there's $2 trillion offshore that needs to "repatriated" back to the U.S.

"We're the strongest military power because we have been the strongest economic power. The two are twins, you can't separate them. As you get weaker economically, you become weaker militarily and that has scary consequences," he said. 

The new report comes just after the national debt surpassed $18 trillion.

Watch the discussion above and let us know what you think about the reasons for the current state of the U.S. economy. 

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