State Personal Income 2015
State personal income grew on average 4.4 percent in 2015, the same rate as in 2014, according to estimates released today by the U.S. Bureau of Economic Analysis. Growth of state personal income—the sum of net earnings by place of residence, property income, and personal current transfer receipts—ranged from -0.2 percent in North Dakota to 6.3 percent in California (table 1).
Net earnings. Net earnings grew 4.2 percent on average in 2015, down from 4.6 percent in 2014 (table 2). Earnings grew in 21 of the 24 industries for which BEA prepares estimates, with professional and business services, healthcare, and construction contributing the most to overall income growth in 2015 (table 3). Construction earnings increased for the fifth consecutive year and is now higher than its previous peak before the Great Recession. Earnings in mining and farming, however, fell due to declines in global prices for energy and agricultural commodities.
The percent change in net earnings in 2015 ranged from 2.8 percent in North Dakota to 6.5 percent in California (table 5).
- Earnings in professional services grew 6.6 percent nationally, and was the leading contributor to the growth in personal income in five of the fastest growing states: California, Georgia, Colorado, North Carolina, and Tennessee.
- Earnings in healthcare grew 4.5 percent nationally, and was the leading contributor to the growth in personal income in two of the fastest growing states: Oregon and Florida.
- Earnings in construction grew 8.5 percent nationally, and was the leading contributor to the growth in personal income in two of the fastest growing states: Utah and Nevada.
- Earnings in mining declined 5.2 percent nationally, and subtracted more than any other industry from the growth in personal income in four of the slowest growing states: North Dakota, Wyoming, West Virginia, and Oklahoma.
- Earnings in farming declined 21.9 percent nationally, and subtracted more than any other industry from the growth in personal income in three of the slowest growing states: South Dakota, Iowa, and Nebraska.
Property income. Property income (dividends, interest, and rent) grew 4.0 percent on average in 2015, the same as in 2014. Dividend income increased 6.5 percent in 2015, up from 3.4 percent in 2014. Growth in interest and rental income, in contrast, slowed to 0.8 percent and 7.5 percent in 2015, down from 2.4 percent and 8.4 percent, respectively in 2014. The growth in property income ranged from 3.4 percent in South Dakota to 5.4 percent in Wyoming.
Personal current transfer receipts. Personal current transfer receipts grew 5.3 percent on average in 2015, up from 4.2 percent in 2014. Medicaid benefits grew 9.8 percent, Social Security grew 4.5 percent, and Medicare grew 3.7 percent. State unemployment insurance compensation, in contrast, fell 6.6 percent. The growth in personal current transfer receipts ranged from 2.1 percent in the District of Columbia to 8.5 percent in Nevada.
Fourth quarter personal income. State personal income grew 0.8 percent on average in the fourth quarter of 2015, down from 1.0 percent in the third quarter. Thirty-three states, including the four largest, California, Texas, Florida, and New York had slower growth in personal income in the fourth quarter than in the third quarter. Growth rates ranged from -0.1 percent in Wyoming, Oklahoma, and Nebraska to 1.3 percent in Michigan (table 6). Growth in Michigan, and eight other states (Missouri, Kentucky, Ohio, Illinois, Texas, Indiana, Kansas, and Tennessee) was boosted by bonuses paid to workers represented by the United Auto Workers for ratifying new contracts.
Revisions. Today, BEA also released revised quarterly personal income estimates for 2015:I to 2015:III. Revisions were made to incorporate source data that are more complete and more detailed than previously available, and to align the states with revised national estimates.
Next quarterly state personal income release – June 22, 2016, at 8:30 A.M. for first quarter 2016.
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. Per capita personal income is calculated as the total personal income of the residents of a state divided by the population of the state. In computing per capita personal income, BEA uses the Census Bureau's annual midyear population estimates. 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/spi2014.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/2016rd.htm
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