State personal income growth averaged 0.3 percent in the third quarter of 2009 with 19 states seeing net earnings growth for the first time in at least a year, according to estimates released today by the U.S. Bureau of Economic Analysis. Personal income growth rates ranged from 0.9 percent in Alaska to -0.4 percent in Louisiana.
Although third-quarter personal income growth was slower than second-quarter growth (0.8 percent), its composition improved. Net earnings accounted for most of third-quarter growth in 32 states and for the nation. In contrast, transfer receipts accounted for most second-quarter personal income growth in 42 states.
Inflation, as measured by the national price index for personal consumption expenditures, accelerated to 0.7 percent in the third quarter after rising 0.3 percent in the second quarter. This increase in the prices households paid for goods and services was greater than or equal to the personal income increases in every state except Alaska.
Nationally, the industries making the largest contributions to third-quarter earnings growth were finance and health care. Smaller contributions of the other private service-producing industries were offset by declines in goods-producing industries. Although mining, construction, and manufacturing continued to decline in the third quarter, they subtracted less from third-quarter earnings growth than from second quarter growth. Federal civilian and military earnings grew in the third quarter, but state and local earnings declined, so that the net contribution of the government sector was nearly zero.
There were some notable differences in industrial performance across states. In New York, state and local government contributed more than any other industry to that state's earnings growth (second highest in the nation) while in Hawaii, declines in state and local government subtracted more than any other industry and accounted for its having the lowest earnings growth in the nation. In the state of Washington, the biggest contributors to third-quarter earnings growth were durable goods manufacturing and information, industries which declined nationally. In Alaska, military earnings contributed more than any other industry to personal income growth followed by health care and transportation.
NOTE.–Quarter-to-quarter percent changes are calculated from unrounded data and are not annualized. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between published estimates.
Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of residence, rental income of persons, personal dividend income, personal interest income, and personal current transfer receipts. Net earnings is earnings by place of work (the sum of wage and salary disbursements, supplements to wages and salaries, and proprietors' income) less contributions for government social insurance, plus an adjustment to convert earnings by place of work to a place-of-residence basis. Personal income is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars (no adjustment is made for price changes).
The estimate of personal income in the United States is derived as the sum of the state estimates; it differs from the estimate of personal income in the national income and product accounts (NIPAs) because of differences in coverage, in the methodologies used to prepare the estimates, and in the timing of the availability of source data.
BEA groups all 50 states and the District of Columbia into eight distinct regions for purposes of data collecting and analyses: New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont); Mideast (Delaware, District of Columbia, Maryland, New Jersey, New York, and Pennsylvania); Great Lakes (Illinois, Indiana, Michigan, Ohio, and Wisconsin); Plains (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota); Southeast (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia); Southwest (Arizona, New Mexico, Oklahoma, and Texas); Rocky Mountain (Colorado, Idaho, Montana, Utah, and Wyoming); and Far West (Alaska, California, Hawaii, Nevada, Oregon, and Washington).
BEA's national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEA's Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.
Next state personal income release – March 25, 2010, at 8:30 A.M. ET for state personal income, fourth quarter 2009.