State Personal Income: Second Quarter 2016
State personal income growth accelerated to 1.0 percent on average in the second quarter of 2016 from 0.3 percent in the first quarter, according to estimates released today by the U.S. Bureau of Economic Analysis. Personal income grew in every state in the second-quarter with growth rates ranging from 0.4 percent in Alaska to 1.4 percent in Utah (table 1).
Earnings. Overall, earnings increased 1.1 percent in the second quarter of 2016 and was the leading contributor to growth in personal income in most states (table 2).
- In Utah, the state with the fastest growth in personal income, earnings grew 1.5 percent. Growth in transportation and warehousing earnings was the leading contributor (table 3).
- In Nebraska and Idaho, the states with the second and third fastest growth in personal income, earnings grew 1.6 percent and 1.4 percent respectively. Growth in farm earnings made the largest contribution to overall earnings growth in both states.
- In Oregon, with 1.3 percent growth in personal income, earnings grew 1.5 percent. Growth in management of companies and enterprises earnings made the largest contribution to personal income growth.
- In Florida and Nevada, states with 1.2 percent growth in personal income, earnings grew 1.3 percent. Growth in healthcare earnings was the leading contributor to growth in Florida, and growth in accommodations and food services earnings was the leading contributor in Nevada.
For the nation, earnings grew in 22 of the 24 industries for which BEA prepares quarterly estimates. Health care, professional services, and transportation and warehousing were the leading contributors to overall growth in personal income.
Mining earnings fell 2.2 percent nationally in the second quarter, the seventh consecutive quarterly decline (table 5). Lower mining earnings was the leading contributor to below average earnings and personal income growth in four of the five slowest growing states: Alaska, Wyoming, Oklahoma, and North Dakota. Lower farm earnings was the leading contributor to below average earnings and personal income growth in South Dakota.
Updates to Personal Income. In addition to today's release of 2016 Q2 personal income, BEA also released revised quarterly and annual state personal income estimates for the 1998 Q1 to 2016 Q1 periods. Revisions are usually made each September to incorporate the results of the annual revision of the national income and product accounts (NIPAs), to incorporate state source data that are more complete and more detailed than those previously available, and to update the seasonal factors used for the quarterly estimates. In addition, this year's annual revision introduced two major methodological improvements affecting nonfarm proprietors' income that were discussed in the July 2016 issue of the Survey of Current Business: (1) improved geocoding and editing of source data from IRS Form 1065 (Partnership Returns) and Schedule C of Form 1040 (Sole Proprietor Returns), and (2) an improved method of allocating national control totals to states. A complete presentation and discussion of the data and revisions will be provided in the October 2016 issue of the Survey of Current Business.
Next release: December 20, 2016 at 8:30 A.M. EST – State Personal Income: Third Quarter 2016.
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- BEA Regional Facts (BEARFACTS), a narrative summary of personal income, per capita personal income, and components of income for each state.
- Complete information on the sources and methods for the estimation of BEA's State Personal Income and Employment.
Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.
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 mid-quarter population estimates based on unpublished Census Bureau data.
Earnings by place of work is the sum of wages and salaries, supplements to wages and salaries, and proprietors’ income. BEA’s industry estimates are presented on an earnings by place of work basis.
Net earnings by place of residence is earnings by place of work less contributions for government social insurance, plus an adjustment to convert earnings by place of work to a place-of-residence basis. BEA presents net earnings on an all industry level.
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.
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 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).
Uses 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.
List of News Release Tables
Table 1. Personal Income, by State and Region
Table 2. Personal Income Change by Component, by State and Region
Table 3. Contributions of Earnings to Percent Change in Personal Income by Industry, State and Region
Table 4. Earnings Growth by Industry, State and Region
Table 5. Earnings Growth Rates by Industry, State and Region
Table 6. Revisions to Personal Income by State and Region, 2013–2015