Coming Soon: Real Personal Income Statistics for States and Metropolitan Areas

The Bureau of Economic Analysis will soon release real personal income statistics using regional price indexes to adjust BEA’s personal income data for differences in the cost of living across states and metro areas. These new statistics will inform decisions by businesses and households alike – from deciding where to move for a new job or locating a new company to helping economic development offices shape regional marketing plans and comparing economic performances across regions.

Across the U.S., there are differences in the cost of everything from medical care to housing. In some states, such as Hawaii and New York, goods and services cost more. In others, such as South Dakota and Mississippi, they cost less. Just as adjusting U.S. economic growth for inflation (real GDP) is critical for comparing the high inflation years of the early 1980s to the low inflation years of the late 1990s, adjusting state personal incomes (real state personal income) for differences in the cost of living across states is important in comparing incomes, and the purchasing power of that income across states.

BEA will provide comprehensive data on regional differences in real incomes, on April 24, when it releases statistics for 50 states and for 381 metro areas. The report will cover the period 2008 through 2012.

Economists call indexes that compare the level of prices of goods and services across geographic areas purchasing power parity indexes. BEA has worked with the Bureau of Labor Statistics, the Census Bureau, and other experts in price measurement to develop its new regional price parities. These regional price parities, which measure differences in the level of prices across states and metro areas, are used in combination with BEA’s national Personal Consumption Expenditures (PCE) price index, which measures the changes in prices over time, (or inflation), to compare personal incomes across regions and over time.

Last year, BEA released prototype statistics of this kind. This year, for the first time, BEA will start releasing annual reports on a regular basis.

February 2014 Trade Gap Is $42.3 Billion

The U.S. monthly international trade deficit increased in February 2014 according to the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. The deficit increased from $39.3 billion in January (revised) to $42.3 billion in February as exports decreased and imports increased. The previously published January deficit was $39.1 billion. The goods deficit increased $2.2 billion from January to $61.7 billion in February; the services surplus decreased $0.8 billion from January to $19.4 billion in February.MonthlyTrade_Feb2014

Exports
Exports of goods and services decreased $2.0 billion in February to $190.4 billion, reflecting a decrease in exports of goods. Exports of services were nearly unchanged.

  • The decrease in exports of goods mostly reflected decreases in industrial supplies and materials and in capital goods that were partly offset by increases in consumer goods and in other goods.
  • Exports of services were nearly unchanged. Increases in other private services, which includes items such as business, professional, and technical services, insurance services, and financial services, and in royalties and license fees were mostly offset by a decrease in passenger fares.

Imports
Imports of goods and services increased $1.0 billion in February to $232.7 billion, mostly reflecting an increase in imports of services. Imports of goods also increased.*

  • The increase in imports of services was mainly accounted for by an increase in royalties and license fees, which included payments for the rights to broadcast the 2014 Winter Olympic Games.
  • The increase in imports of goods mostly reflected an increase in automotive vehicles, parts, and engines. Capital goods decreased.

Goods by geographic area (not seasonally adjusted)

  • The goods deficit with Canada decreased from $4.0 billion in January to $1.9 billion in February. Exports increased $0.8 billion to $23.5 billion, and imports decreased $1.3 billion to $25.4 billion.
  • The goods deficit with China decreased from $27.8 billion in January to $20.9 billion in February. Exports decreased $0.5 billion to $9.9 billion, and imports decreased $7.5 billion to $30.7 billion.
  • The goods deficit with Mexico increased from $2.8 billion in January to $4.0 billion in February. Exports decreased $0.8 billion to $18.3 billion, and imports increased $0.4 billion to $22.3 billion.

* In February, imports of goods on a balance of payments basis increased, but imports of goods on a Census basis decreased. Total goods data are reported on a balance of payments basis. Commodity and country data for goods are on a Census basis. Monthly statistics are seasonally adjusted unless otherwise specified.

Read the full report.

Real Consumer Spending Rises in February

PersInc_Feb_2014Personal income increased 0.3 percent in February, the same as in January. Wages and salaries, the largest component of personal income, increased 0.2 percent after increasing 0.3 percent.

Current-dollar disposable personal income (DPI), after-tax income, increased 0.3 percent in February, the same as in January.

Real DPI, income adjusted for taxes and inflation, increased 0.3 percent in February after increasing 0.2 percent in January.

Real consumer spending, spending adjusted for price changes, increased 0.2 percent in February after increasing 0.1 percent in January. Spending on nondurable goods increased 0.3 percent after decreasing 0.9 percent.

PCE prices increased 0.1 percent in February, the same increase as in January. Excluding food and energy, PCE prices rose 0.1 percent in February.

Personal saving as a percent of DPI–the personal saving rate–was 4.3 percent in February and 4.2 percent in January.

Read the full report.

PersInc_Feb_2014_Chart