State Personal Income: Second Quarter 2014 with Annual Revisions
State personal income growth accelerated to 1.5 percent in the second quarter of 2014 from 1.2 percent in the first quarter, according to estimates released today by the U.S. Bureau of Economic Analysis. Personal income growth ranged from 2.7 percent in North Dakota and Nebraska to 1.1 percent in New York and Alaska, with growth accelerating in 36 states. Inflation, as measured by the national price index for personal consumption expenditures, accelerated to 0.6 percent in the second quarter from 0.3 percent in the first quarter.
The acceleration in personal income growth was mostly attributable to property income (dividends, interest, and rent), which grew 1.8 percent in the second quarter after growing 0.2 percent in the first quarter. Growth in both net earnings and transfer receipts did not accelerate in the second quarter; growing 1.4 percent and 1.6 percent respectively.
Earnings by state and industry
Overall, earnings grew $149.0 billion in the second quarter, slightly less than the $156.2 growth in the first quarter. Earnings grew in 22 of the 24 industries for which BEA prepares quarterly estimates, with the largest nonfarm increases in health care ($17.4 billion), professional services ($17.1 billion), retail trade ($13.7 billion), and durable goods manufacturing ($12.8 billion).
For the second consecutive quarter, the earnings increase in Texas was larger than the increase in every other state. Earnings in Texas, which accounted for 8.9 percent of the nation, grew $19.2 billion in the second quarter. Earnings in California, which accounted for 13.2 percent of the nation, grew $16.9 billion.
Durable goods manufacturing contributed the most to nonfarm earnings growth in 15 states. Of these, Oklahoma had the largest percentage increase, 4.1 percent, while the U.S grew 2.0 percent. Professional services contributed the most to nonfarm earnings growth in 13 states. Of these, Alaska's 3.4 percent pace was the fastest and more than double the 1.6 percent national increase. Healthcare contributed the most to nonfarm earnings growth in 12 states. Of these states, the fastest growth was in New Mexico (2.1 percent) while the U.S. grew 1.5 percent. Retail trade contributed the most to nonfarm earnings growth in 3 states. Of these, the increase was largest in the state of Washington, whose 2.7 percent growth compared to a 2.2 percent national increase.
North Dakota, the state with the fastest earnings growth in the second quarter, had particularly large contributions to nonfarm earnings growth from its mining (including oil and gas extraction), construction, and transportation industries.
In New York, finance earnings fell $2.1 billion (1.5 percent) and in the state of Washington, durable goods manufacturing earnings fell $0.7 billion (2.9 percent). In both cases the decline followed a quarter in which bonuses were paid and in both cases second-quarter earnings were above year-ago levels. In Alaska, earnings declined in eight industries, with the largest decline—1.3 percent—in the information industry.
Revisions. Today, BEA also released revised quarterly and annual state personal income estimates. Revisions are usually made each September to incorporate source data that are more complete and more detailed than previously available. In general, the estimates were revised for the 2001Q1 to 2014Q1 period. In addition, the annual estimates of certain components of the finance and insurance industry—but not the annual totals—were revised from 1998 to 2000 and the annual estimates of monetary and imputed interest receipts—but not annual totals of personal interest income—were revised from 1958 to 2000. Farm income and expense source data and Medicaid benefits source data, which are usually incorporated at this time, are unavailable. 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, 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 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. 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 quarterly state personal income release – December 19, 2014, at 8:30 A.M. for state personal income, third quarter 2014.