State personal income growth slowed to 1.0 percent in the second quarter of 2012, from 1.7 percent in the first quarter, according to estimates released today by the U.S. Bureau of Economic Analysis. Growth slowed in 39 states plus the District of Columbia, accelerated in 10, and was unchanged in Nevada. Personal income growth ranged from 2.1 percent in North Dakota to 0.4 percent in New Mexico. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 0.2 percent in the second quarter from 0.6 percent in the first quarter.
Earnings by industry. Overall, earnings grew 0.8 percent in the second quarter of 2012, after growing 1.9 percent in the first quarter. Earnings increased in 21 of the 24 industries for which BEA prepares quarterly estimates, with the largest percentage increases in forestry, fishing and related industries (which grew 4.6 percent, up from 4.0 percent in the previous quarter) and real estate (which grew 2.4 percent, after declining 4.7 percent in the first quarter). The largest contributions to earnings growth were in professional services (which increased $15.1 billion, down from $27.5 billion) and health care (which increased $9.4 billion, down from $17.9 billion).
Second-quarter earnings declined in 3 industries with the largest percentage decline, 1.8 percent, and largest dollar decline, $2.0 billion, in farming (farm earnings grew 10.4 percent or $10.5 billion in the first quarter). Civilian federal government and military earnings also fell in the second quarter.
Construction, nondurable goods manufacturing, state and local government, and the military, the four industries with the weakest earnings growth during the current recovery, continued to lag other industries in the second quarter. Earnings in the construction industry grew 0.5 percent, nondurable goods manufacturing earnings grew 0.3 percent, state and local government earnings grew 0.2 percent, and military earnings fell 0.3 percent.
Most of the growth in construction and nondurable goods manufacturing industries was concentrated in just two or three states. Construction earnings grew $1.54 billion (2.6 percent) in Texas and $0.23 billion (2.5 percent) in Arizona in the second quarter, accounting for nearly two-thirds of the national $2.75 billion gain. Most of the $1.14 billion national gain in nondurable goods manufacturing earnings was concentrated in Texas ($0.28 billion), Illinois ($0.20 billion) and Ohio ($0.12 billion).
Revisions. Today, BEA also released revised quarterly and annual state personal income beginning with the first quarter of 2009. Revisions are usually made each September to incorporate source data that are more complete and more detailed than previously available. The average absolute revision to personal income for 2011 for the 50 states and the District of Columbia was 1.0 percentage point. A complete presentation and discussion of the data and revisions will be provided in the October issue of the Survey of Current Business. All of the regional statistics underlying this news release along with mapping and charting software are available at http://bea.gov/regional/.
NOTE.— Quarter-to-quarter percent changes (growth rates) 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, property income, and personal current transfer receipts. Property income is rental income of persons, personal dividend income, and personal interest income. Net earnings is earnings by place of work (the sum of wage and salary disbursements, supplements to wages and salaries, and proprietorsí 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 and the estimate for the District of Columbia; 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).
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.
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 19, 2012, at 8:30 A.M. for state personal income, third quarter 2012.