U. S. Personal Income: First Quarter 2011
State personal income growth accelerated to 1.8 percent in the first quarter of 2011, from 0.8 percent in the fourth quarter of 2010, according to estimates released today by the U.S. Bureau of Economic Analysis. Personal income increased in all states, with growth ranging from 0.7 percent in Iowa to 6.9 percent in North Dakota. Inflation, as measured by the national price index for personal consumption expenditures, increased to 0.9 percent in the first quarter from 0.4 percent in the fourth quarter of 2010.
A two-percentage point reduction in the personal contribution rate for social security accounted for most of the acceleration in first-quarter personal income growth in most states. The reduction in the contribution rate for social security is one of the provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
The wide range in the personal income growth rates between the farming states of Iowa and North Dakota reflects very different market conditions for crops and livestock. Farm income in some states, such as North Dakota, benefited from surging global wheat demand (which raised prices in the U.S. 18 percent in the first quarter) while farm income in other states, such as Iowa, plummeted because of rising livestock expenses and falling production.
Earnings by industry. Mining and durable-goods manufacturing were the best performing industries in the first quarter. Overall, mining earnings grew 5.5 percent and durable goods earnings grew 2.8 percent. Earnings in all other industries combined grew only 0.8 percent.
The mining industry (which includes oil and gas extraction) contributed more than any other nonfarm industry to personal income growth in six of the seven fastest growing states (North Dakota, Wyoming, Texas, Montana, Oklahoma, and Alaska). In Wyoming it contributed 0.7 percentage point to first-quarter personal income growth. Mining was also the major contributor to personal income growth in Louisiana and West Virginia.
In the state of Washington durable-goods manufacturing contributed one half percentage point to personal income growth in the first quarter of 2011. In another 25 states durable goods contributed a smaller, but still substantial, amount that was greater than that of any other nonfarm industry. Four of these states (Mississippi, New Hampshire, Washington, and Wisconsin) were among the fastest growing states in the first quarter.
Even with this recent strong growth, U.S. mining earnings remains 3.9 percent below its peak in the third quarter of 2008 and U.S. durable-goods earnings remains 4.7 percent below its peak in the second quarter of 2008.
All of the regional statistics underlying this news release along with mapping and charting software are available at http://www.bea.gov/regional/sqpi/.
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.
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. 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 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).
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.
Source: U.S. Bureau of Economic Analysis
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