State Personal Income: First Quarter 2018
State personal income increased 4.3 percent at an annual rate in the first quarter of 2018, after increasing 4.7 percent in the fourth quarter of 2017, according to estimates released today by the Bureau of Economic Analysis1 (table 1). Personal income increased in all states and the District of Columbia. The percent change in personal income across all states ranged from 7.4 percent in Washington to 2.0 percent in Idaho.
Increases in all income components – earnings, property income (dividends, interest and rent), and transfer receipts – contributed to personal income growth in every state and the District of Columbia in the first quarter except one, Idaho (table 2).
Earnings. Earnings increased 4.7 percent in the first quarter of 2018, after increasing 4.6 percent in the fourth quarter of 2017 and was the leading contributor to personal income growth in most states, including the four fastest growing states – Washington, Utah, Delaware, and Kentucky.
- Information services was the leading contributor to the earnings increase in Washington (table 3).
- Durable manufacturing was the leading contributor to the earnings increase in Utah and Kentucky.
- Finance and insurance was the leading contributor to the earnings increase in Delaware.
Earnings increased in 23 of the 24 industries for which BEA prepares quarterly estimates (table 4). For the nation, healthcare and social assistance; durable manufacturing; and professional, scientific, and technical services were the leading contributors to overall growth in personal income (chart 1).
- Earnings in durable manufacturing, which increased $20.7 billion dollars in the first quarter, was boosted by $4.3 billion dollars in profit sharing payments made by auto manufacturers to workers in nine states: Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Tennessee, and Texas.
- Federal civilian and military earnings increased $6.0 billion and $3.4 billion dollars, respectively, due to pay raises that took effect in the first quarter.
- Mining earnings increased $3.1 billion dollars in the first quarter, the largest increase since the second quarter of 2014 as higher prices for energy related commodities led to increased earnings.
Transfer Receipts. Transfer receipts increased 5.0 percent for the nation in the first quarter of 2018, after increasing 2.1 percent in the fourth quarter of 2017. The first quarter growth primarily reflects a 2.0 percent increase in the Social Security cost of living adjustment.
Property Income. Property income increased 2.6 percent for the nation in the first quarter of 2018, after increasing 7.4 percent in the fourth quarter.
Presentation Change of State Quarterly Personal Income. Growth rates in personal income presented in this release are annualized. This represents a change in presentation from prior releases. Annualized growth rates show what the percent change in personal income would be if the quarterly rate continued for four quarters. This conforms the presentation of growth rates in state personal income with the release presentations of other BEA statistics and will allow data users to more easily compare growth in state personal income with other quarterly BEA statistics such as U.S. GDP, U.S. personal income and GDP by state. Quarterly personal income growth rates will continue to be available to data users in BEA's interactive database.
Updates to Personal Income. Today, BEA also released revised quarterly estimates for 2017:Q1 to 2017:Q4. Updates were made to incorporate source data that are more complete and more detailed than previously available, and to align the states with revised national estimates.
Comprehensive Update of the State and Local Area Personal Income Accounts On September 25, 2018, BEA will release the first set of updated estimates from the 2018 comprehensive update of the state personal income accounts. In November, BEA will release updated annual estimates of personal income for local areas.
Next release: September 25, 2018, at 8:30 A.M. EDT — State Personal Income: Second Quarter 2018
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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 midquarter 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 annualized. Annualized rates of change can be calculated as follows: (((level of later quarter / level of earlier quarter)^4)-1)*100. 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, 2016:Q4-2018:Q1
Table 2. Personal Income Change by Component, by State and Region, 2017:Q4-2018:Q1
Table 3. Contributions of Earnings to Percent Change in Personal Income by Industry, State and Region, 2017:Q4-2018:Q1
Table 4. Earnings Growth by Industry, State and Region, 2017:Q4-2018:Q11 For more information on changes in presentation of growth rates see box on page 3 of the release.