State Personal Income: Second Quarter 2015
State personal income grew 0.9 percent on average in the second quarter of 2015, after growing 0.8 percent in the first quarter, according to estimates released today by the U.S. Bureau of Economic Analysis. Personal income grew in every state except Oklahoma in the second quarter. In the first quarter, personal income grew in 34 states. Second-quarter personal income growth rates ranged from zero in Oklahoma to 1.5 percent in the state of Washington.
Earnings. Overall, earnings increased 0.6 percent in the second quarter of 2015, after increasing 0.4 percent in the first quarter.
Earnings declined in the second quarter in six of the 24 industries for which BEA prepares quarterly estimates, including mining—which declined 3.6 percent—and durable goods manufacturing—which declined 0.4 percent (see Table 5). This was the second consecutive decline for both industries.
Earnings declined in five states in the second quarter. In three of those states, North Dakota (-0.3 percent), West Virginia (-0.4 percent), and Wyoming (-0.4 percent), the decline was the second consecutive decline and was concentrated in mining (which includes oil and gas extraction).1 Mining earnings also declined 3.6 percent in the second quarter in Texas, a state which accounts for nearly half of the nation's mining earnings. However, in contrast to other major mining states, total earnings in Texas continued to grow. Earnings grew 0.2 percent in the second quarter in Texas and 0.9 percent in the first.
Professional services contributed the most to second-quarter earnings growth for the nation, as it did in the first quarter. Earnings in professional services grew 1.5 percent in the second quarter following a 2.0 percent increase in the first.
Total earnings grew 1.0 percent or more in the second quarter in 4 states: Washington (1.4 percent), Nevada (1.1 percent), New York (1.0 percent), and Virginia (1.0 percent). Professional services was the largest contributor to second-quarter earnings growth in Washington and Virginia; accommodations was the largest contributor in Nevada; and finance contributed the most in New York.
Personal current transfer receipts. Personal current transfer receipts increased 1.0 percent in the second quarter of 2015, after rising 2.1 percent in the first quarter. Social Security, Medicare, and Medicaid transfer receipts increased in most states while state unemployment insurance (UI) benefits declined. Notable exceptions included North Dakota, Oklahoma, Wyoming, Texas, and West Virginia where state UI benefits rose in both the first and second quarters. State UI benefits rose 115 percent from the fourth quarter of 2014 to the second quarter of 2015 in North Dakota, 74 percent in Oklahoma, 66 percent in Wyoming, 49 percent in Texas, and 27 percent in West Virginia.
Revisions. Today, BEA also released revised quarterly and annual state personal income estimates. Revisions are usually made each September to incorporate source data that are more complete and more detailed than previously available. In particular, BEA introduced new journey-to-work source data from the American Community Survey to adjust earnings for the residence of workers and new farm source data that incorporated the 2012 Census of Agriculture. The state personal income estimates also include a new treatment of refundable federal income tax credits that was introduced in the July 2015 annual revision to the National Income and Product Accounts. In general, the estimates of state personal income were revised for the 1976Q1 to 2015Q1 period. A complete presentation and discussion of the data and revisions will be provided in the October issue of the Survey of Current Business.
Next quarterly state personal income release – December 21, 2015, at 8:30 A.M. for third quarter 2015.
1 Second-quarter earnings also declined in Oklahoma (0.5 percent) and Kansas (0.4 percent).
Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of residence, property income, and personal current transfer receipts. Net earnings by place of residence is earnings by place of work (the sum of wages and salaries, 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. Property income is rental income of persons, personal dividend income, and personal interest income. Personal current transfer receipts are benefits received by persons from federal, state, and local governments and from businesses for which no current services are performed. They include retirement and disability insurance benefits (mainly Social Security), medical benefits (mainly Medicare and Medicaid), income maintenance benefits, unemployment insurance compensation, veterans' benefits, and federal education and training assistance.
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 for the United States is the sum of the state estimates and the estimate for the District of Columbia; it differs slightly 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.
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.
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).
Use of State Personal Income Statistics
State personal income statistics provide a framework for analyzing current economic conditions in each state and can serve as a basis for decision making. For example:
- Federal government agencies use the statistics as a basis for allocating funds and determining matching grants to states. The statistics are also used in forecasting models to project energy and water use.
- State governments use the statistics to project tax revenues and the need for public services.
- Academic regional economists use the statistics for applied research.
- Businesses, trade associations, and labor organizations use the statistics for market research.
The entire historical time series for these estimates can be accessed in BEA's Interactive Data Application at www.bea.gov/itable/. Mapping and charting software are also available.
Further discussion of the regional statistics presented in this news release will be provided in the next issue of the Survey of Current Business, available online at: www.bea.gov/scb/index.htm
Complete information on the sources and methods for the estimation of BEA's State Personal Income and Employment is available online at: www.bea.gov/regional/pdf/spi2013.pdf
BEA Regional Facts (BEARFACTS), a narrative summary of personal income, per capita personal income, and components of income for each state, is available online at: www.bea.gov/regional/bearfacts/
BEA's news release schedule is available at: www.bea.gov/newsreleases/2015rd.htm
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