News Release
State Personal Income, 4th quarter 1998 and Per Capita Personal Income, 1998 (preliminary)
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1998 STATE PER CAPITA PERSONAL INCOME
and STATE PERSONAL INCOME (Preliminary)
North Dakota and Colorado led the nation in per capita personal income growth in 1998, according to preliminary estimates released by the Commerce Department's Bureau of Economic Analysis.
For the nation, per capita income grew 4.4 percent in 1998 to $26,412, up from $25,288 in 1997 (see table 1). The 4.4-percent growth rate in per capita income was more than five times the 0.8-percent increase in prices (as measured by the price index for personal consumption expenditures). All 50 states and the District of Columbia had increases in per capita income that exceeded the increase in prices.
State per capita income growth in 1998
Fastest growing states. In 1998, the six states with the fastest growth in per capita income were North Dakota (7.8 percent), Colorado (6.1 percent), Washington (5.7 percent), Texas (5.3 percent), Vermont (5.0 percent), and Massachusetts (5.0 percent).
In all six fastest growing states, growth rates in personal income exceeded or equaled the U.S. average of 5.4 percent, and in Colorado, Washington, and Texas, growth rates in population were above the U.S. average of 1.0 percent.
In all six fastest growing states, net earnings was the major contributor to personal income growth (see table 5, contribution to percent change in personal income, and "Definitions" on page 6).
By industry, in all of the fastest growing states except North Dakota, earnings in services was the largest contributor to earnings growth. In North Dakota, earnings in farms was the largest contributor, reflecting increases in subsidy payments, authorized by the Federal 1998 Omnibus Budget Resolution, and a recovery of crop production in the state.
In addition, in Colorado, earnings in construction and in finance, insurance, and real estate contributed substantially to earnings growth; in Washington and Texas, earnings in manufacturing contributed; in Massachusetts, earnings in finance, insurance, and real estate contributed; and in Vermont, earnings in construction and manufacturing contributed.
Slowest growing states.& In 1998, the five states with the slowest growth in per capita income were Hawaii (2.1 percent), Wyoming (2.5 percent), Nevada (2.6 percent), Montana (2.6 percent), and Alaska (2.8 percent).
In all of the slowest growing states except Nevada, growth in personal income was less than the U.S. average, and population growth was less than the U.S. average. In Nevada, the slow growth in per capita income reflected rapid growth in population that largely offset above-average growth in personal income.
In all of the slowest growing states except Nevada, personal income growth was held back by slow growth in net earnings.
By industry, in Hawaii, a decline in earnings in construction contributed to slow earnings growth; in Wyoming, a decline in earnings in transportation and public utilities contributed to slow growth in earnings; in Montana, declines in earnings in farms and in transportation and public utilities contributed to slow growth in earnings; and in Alaska, declines in earnings in manufacturing and government contributed to the slow growth in earnings.
Ranking of state per capita income
In 1998, per capita income ranged from $37,598 in Connecticut to $18,958 in Mississippi.
The ranking of states by per capita income changed little between 1997 and 1998 (see table 4). Only North Dakota increased more than two positions in rank, and only Nevada declined more than two positions in rank.
The 10 states with the highest per capita incomes in 1998 were:
--------Dollars------- ----Rank----
1997 1998 1997 1998
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Connecticut ......... 35,863 37,598 1 1
New Jersey .......... 32,356 33,937 2 2
Massachusetts ....... 31,239 32,797 3 3
New York ............ 30,250 31,734 4 4
Maryland ............ 28,674 29,943 5 5
Delaware ............ 28,493 29,814 6 6
New Hampshire ....... 27,766 29,022 7 7
Illinois ............ 27,688 28,873 8 8
Colorado ............ 27,015 28,657 9 9
Washington .......... 26,451 27,961 11 10
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Except for Illinois, the states with the highest per capita incomes in 1998 had growth rates that exceeded or equaled the U.S. average of 4.4 percent.
The 10 states with the lowest per capita incomes in 1998 were:
--------Dollars------- ----Rank----
1997 1998 1997 1998
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Louisiana ........... 20,458 21,346 41 41
South Carolina ...... 20,508 21,309 40 42
Idaho ............... 20,392 21,081 42 43
Oklahoma ............ 20,305 21,072 43 44
Utah ................ 20,185 21,019 44 45
Arkansas ............ 19,595 20,346 47 46
Montana ............. 19,660 20,172 46 47
New Mexico .......... 19,298 19,936 48 48
West Virginia ....... 18,724 19,362 49 49
Mississippi ......... 18,098 18,958 50 50
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Except for Mississippi, the states with the lowest per capita incomes in 1998 had growth rates that were below the U.S. average of 4.4 percent.
State personal income for 1998 and for the fourth quarter of 1998
The preliminary 1998 estimates of state personal income released today are derived from the average of quarterly state personal income estimates for 1998. The estimates for the fourth quarter of 1998 are available for the first time today and are presented in table 8.
In 1998, U.S. personal income increased $368.4 billion, or 5.4 percent, compared with 5.7 percent in 1997 (see tables 2 and 5). The Southeast and Far West regions had the largest dollar increases in 1998. Although both of these regions experienced slowdowns in growth rates, they still accounted for 22.2 percent and 19 percent of the growth in U.S. personal income, respectively. The increases in personal income in the Southeast were largely accounted for by Florida, Georgia, Virginia, and North Carolina, and in the Far West by California.
Among states, California accounted for the largest share of the increase in U.S. personal income in 1998 (14 percent). California has accounted for the largest share of the increase in U.S. personal income since 1994. Texas accounted for a 9.1-percent share of the increase in U.S. personal income in 1998, down from a 9.5-percent share in 1993. Texas has accounted for the second largest share of the increase in U.S. personal income since 1993.
In the fourth quarter of 1998, the four states with the fastest growth in personal income were North Dakota, South Dakota, Nebraska, and Iowa. In these four states, the fast growth in personal income reflected large increases in farm subsidy payments, authorized by the Federal 1998 Omnibus Budget Resolution.
Definitions
Personal income is the income received by all persons from participation in production, from government and business transfer payments, and from government interest. Personal income is the sum of net earnings by place of residence, rental income of persons, personal dividend income, personal interest income, and transfer payments. Net earnings is earnings by place of work -- the sum of wage and salary disbursements (payrolls), other labor income, and proprietors' income -- less personal contributions for 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; it differs from the estimate of personal income in the national income and product accounts (NIPA's) because of differences in coverage, in the methodologies used to prepare the estimates, and in the timing of the availability of source data.
Per capita personal income is the annual total personal income of residents divided by resident population as of July 1.
Private goods-producing industries are defined to consist of farms; agricultural services, forestry, and fishing; mining; construction; and manufacturing. Private services-producing industries are defined to consist of transportation and public utilities; wholesale trade; retail trade; finance, insurance, and real estate; and services.
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Next state personal income release -- July 27, at 9:00 AM EDT for
State Personal Income: First Quarter 1999