Archive for the 'State Personal Income' Category

BEA Introduces New Measures of the Regional Economy—Estimates of Real Personal Income for States, 2008–2012

Today, the U.S. Bureau of Economic Analysis released real, price-adjusted estimates of personal income for states and metropolitan areas for 2008-2012. The price-adjustments are based on regional price parities (RPPs) and on BEA’s national Personal Consumption Expenditure (PCE) price index. The RPPs measure geographic differences in the price levels of consumption goods and services relative to the national average, and the PCE price index measures national price changes over time. Using the RPPs in combination with the PCE price index allows for comparisons of the purchasing power of personal income across regions and over time. These estimates are being released for the first time as official statistics.*
Real-SPI_2012

Growth in real state personal income from 2011 to 2012 ranged from a decline of 1.2% in South Dakota to an increase of 15.1% in North Dakota. These growth rates reflect the year-over-year change in the state’s nominal personal income, the change in the national PCE price index, and the change in the regional price parity for that state. After North Dakota, the states with the largest growth rates were Montana (3.7%), Indiana (3.7%), California (3.4%), and Mississippi (3.4%). South Dakota was the only state with a decline in real personal income. The states with the smallest growth rates were Maine (0.3%), Alaska (0.7%), and Alabama (0.8%). The District of Columbia’s growth rate was 0.4%. States with growth rates close to the national average were Delaware (2.4%), Georgia (2.2%), Illinois (2.4%), Minnesota (2.2%), and Oregon (2.4%).

* Prototype statistics were released for evaluation and comment by users on June 12, 2013.

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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.

State Personal Income: Fourth Quarter 2013

State personal income growth slowed to 0.6 percent in the fourth quarter of 2013, from 1.0  percent in the third quarter. Growth ranged from 1.2 percent in Texas to -0.6 percent in Iowa. The fourth-quarter personal income decline in Iowa and six other states reflected lower crop prices, which reduced the value of farm output and farm earnings. The inflation rate slowed to 0.3 percent in the fourth quarter from 0.5 percent in the third quarter.

StatePersonalIncome4q2013

StatePersonalIncomeTable4q2013

See the full report.