News Release
State Quarterly Personal Income, 1st quarter 2014 - 4th quarter 2014; State Annual Personal Income, 2014 (preliminary estimates)
Average state personal income growth accelerated to 3.9 percent in 2014 from 2.0 percent in 2013, 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 0.5 percent in Nebraska to 5.7 percent in Alaska and Oregon, with 45 states growing faster in 2014 than in 2013. Inflation, as measured by the national price index for personal consumption expenditures, was 1.3 percent in 2014 and 1.2 percent in 2013.
Net earnings. Net earnings grew 4.0 percent on average in 2014 up from 1.8 percent in 2013. The percent change in net earnings in 2014 ranged from -0.8 percent in Nebraska, the only state with a decline, to 6.4 percent in North Dakota. Nonfarm earnings growth of 3.6 percent in Nebraska was offset by a 34.6 percent decline in farm earnings. Similar farm earnings declines–as high as 48 percent–contributed to relatively slow personal income growth in Illinois, Indiana, Iowa, Kansas, Mississippi, Missouri, and South Dakota. In North Dakota, mining and construction earnings grew 19.9 percent and 13.4 percent, respectively, while earnings in all other industries grew 4.8 percent. Mining and construction accounted for 45.9 percent of total earnings growth in North Dakota.
Property income. Property income (dividends, interest, and rent) grew 3.4 percent for the nation in 2014, up from 2.1 percent in 2013. Rental income contributed about half of the increase in 2014. The growth of property income in 2014 ranged from 2.5 percent in South Dakota to 3.9 percent in Delaware. Property income rebounded 3.3 percent in Arkansas after falling 0.2 percent in 2013, the only state with a decline that year.
Personal current transfer receipts. Personal current transfer receipts grew 4.5 percent on average in 2014 up from 2.7 percent in 2013. Medicaid benefits grew 11.1 percent, Social Security grew 4.4 percent, and Medicare grew 2.7 percent. State unemployment insurance compensation, in contrast, fell 40.7 percent. Medicaid transfer receipts increased 13.6 percent in the states where coverage expanded in 2014 under the Affordable Care Act and 7.3 percent in the states where coverage did not expand.1 Total transfer receipt growth in 2014 ranged from 1.8 percent in Louisiana to 20.3 percent in Alaska. Most of the increase in Alaska was accounted for by the Permanent Fund Dividend, which amounted to $1,884 per qualified applicant in 2014 up from $900 in 2013. This contributed 1.7 percentage points to the state's personal income growth rate in 2014.
Fourth quarter personal income
State personal income grew 1.0 percent on average in the fourth quarter of 2014, the same average growth rate as in the third quarter. The acceleration in personal income growth in Florida, Texas, and 30 other states was offset by a slowdown in 15 states, including California and New York. Growth rates ranged from 0.6 percent in Louisiana to 1.5 percent in Texas. The national price index for personal consumption expenditures fell 0.1 percent in the fourth quarter after rising 0.3 percent in the third quarter.
Revisions. Estimates for 2014:I to 2014:III have been revised.
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Next quarterly state personal income release – June 22, 2015, at 8:30 A.M. for first quarter 2015.
1 The states which expanded Medicaid in 2014 were Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Rhode Island, Vermont, Washington, and West Virginia.
Definitions
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.
Statistical Convention
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 Regions
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.
Resources
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/spi2013.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/2015rd.htm
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