WASHINGTON DC, September 20, 2010 - State personal income growth averaged 1.0 percent in the second quarter of 2010 up slightly from 0.9 percent in the first quarter, according to estimates released today by the U.S. Bureau of Economic Analysis. Growth rates ranged from 2.0 percent in North Dakota to 0.3 percent in Nevada. There was no change in the national price index for personal consumption expenditures in the second quarter; inflation was 0.5 percent in the first quarter.
Personal income in 27 states has now climbed above the current-dollar level reached before the recession. Excluding transfer receipts (such as unemployment compensation and social security retirement benefits), however, personal income in only two states-Alaska and Maryland-has returned to that level.
Components of Personal Income
Earnings. Earnings in all nonfarm industries grew in the second quarter nationally, with the largest increases in healthcare ($12.1 billion), professional services ($8.7 billion) and the civilian federal government ($7.4 billion). However, almost all of the earnings growth in the federal government was due to the hire of temporary census workers.
In 26 states health care made the largest contribution of any industry to nonfarm earnings growth in the second quarter. In eight states—Texas, Oklahoma, Louisiana, Wyoming, Alaska, North Dakota, Montana, and West Virginia—the mining industry (including oil and gas extraction) made the largest contribution to nonfarm earnings growth. In six states—Michigan, Ohio, Indiana, Wisconsin, Kentucky, and Iowa—the durable goods industry made the largest contribution. Earnings growth in the civilian federal government exceeded all other nonfarm industries in Alabama, Mississippi, Nevada, and South Carolina. In Maryland, Virginia, New Jersey, and Oregon, professional services made the largest contribution to nonfarm earnings growth. In Nebraska, transportation grew the most. In Washington State, the information industry grew the most, accounting for about 1/4th of nonfarm earnings growth.
Property Income. Dividends, interest, and rent (property income) grew 0.3 percent nationally in the second quarter, down from 1.5 percent growth in the first quarter. Interest income declined in every state. In every state except Louisiana, rental income was the fastest growing component of property income. Louisiana's rental income declined as the program providing homeowner assistance payments associated with the rebuilding after Hurricane Katrina phases out.
Transfer receipts. Personal current transfer receipts increased 2.0 percent in the second quarter after growing 2.6 percent in the first quarter. However, one component of transfers, state unemployment insurance (UI) compensation, fell 3.8 percent ($5.5 billion) in the second quarter after rising 1.9 percent in the first. State UI compensation fell in 36 states, rose in 13, and was unchanged in 1 state. Notably, this compensation fell 15 percent in Indiana and 11 percent in Michigan.
Revisions. BEA also released today revised quarterly and annual state personal income beginning with the first quarter of 2001. Revisions are usually made each September to incorporate source data that are more complete and more detailed than previously available. The average revision to the 2009 personal incomes of the 50 states and the District of Columbia was 1.3 percentage points. A complete presentation and discussion of the data and revisions will be provided in the October issue of the Survey of Current Business.
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 (payrolls), 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 – December 17, 2010, at 8:30 A.M. ET for state personal income, third quarter 2010.