WASHINGTON DC, March 25, 2010 – State personal income declined an average 1.7 percent in 2009, according to estimates released today by the U.S. Bureau of Economic Analysis. The annual percentage change in state personal income ranged from -4.8 percent in Nevada to 2.1 percent in West Virginia (one of six states with a personal income gain in 2009). Inflation, as measured by the national price index for personal consumption expenditures, fell to 0.2 percent in 2009 down from 3.3 percent in 2008.

In three of the six states with personal income growth in 2009, a rise in net earnings and transfer receipts offset declines in property income. Net earnings, which declined 3.7 percent nationally in 2009, rose 0.7 percent in Maryland, 0.7 percent in West Virginia, and 0.3 percent in Virginia. The gains in Maryland and Virginia largely reflect earnings inflows associated with commuters who work in the District of Columbia; wages and salaries paid by employers located in Maryland and Virginia fell 0.1 percent and 0.5 percent respectively. In the other three states with personal income gains in 2009 (Maine, Kentucky, and Hawaii), increased transfer receipts were sufficient to offset declines in both property income and net earnings.

In the states with the largest personal income declines in 2009, the industries with the largest earnings losses typically reflected the states' distinctive economies: Nevada's 4.8 percent personal income decline, the second largest decline among states since 1969, is mostly accounted for by construction and the accommodations industry (which includes casino hotels). The biggest contributors to Wyoming's 3.9 percent personal income decline were mining (including oil and gas extraction) and construction. In New York, where personal income fell 3.4 percent, the earnings losses were primarily concentrated in the finance industry. The biggest earnings decline in Connecticut was also in the finance industry, but manufacturing and construction declined almost as much. Michigan's 3.0 percent personal income decline reflected large losses in durable goods manufacturing. The industries contributing the most to the 2.5 percent fall in personal income in California, and the 2.7 percent fall in Arizona and Florida were construction and manufacturing. Farming can account for all of South Dakota's 3.5 percent personal income decline.

Per capita personal income. Per capita personal income (personal income divided by population) fell 2.6 percent nationally in 2009 after rising 2.0 percent in 2008. Across states, per capita personal income fell as much as 5.9 percent in Wyoming and grew as much as 1.8 percent in West Virginia.

Fourth quarter personal income. State personal income growth averaged 0.9 percent in the fourth quarter of 2009 and ranged from 0.3 percent in Wyoming to 2.2 percent in South Dakota. This is the largest average increase since the 1.2 percent rise in the second quarter of 2008 and contrasts with a 0.4 percent decline in the third quarter. Personal consumption prices rose 0.6 percent in the fourth quarter of 2009, the same increase as in the third quarter.

The industry making the largest contribution to fourth-quarter personal income growth nationally was health care. Notably, earnings in the cyclical manufacturing industry also grew in the fourth quarter for the first time in two years while construction earnings continued to fall. Excluding Texas, earnings in the state and local government industry fell $1.6 billion in the fourth quarter; in Texas those earnings grew $1.9 billion.

Five of the ten fastest growing states in the fourth quarter-South Dakota, North Dakota, Iowa, Nebraska, and Kansas-are in the Plains region. Their strong performance is accounted for by the farm sector; nonfarm personal income growth in these states was at or below the national average.

Quick links to all of the regional statistics underlying this news release along with mapping and charting software and a detailed methodology are available at /regional/quick.cfm.

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).

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.

Disposable personal income is personal income less personal current taxes. It is the portion of personal income that is available for spending and saving.

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 (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.

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Next state personal income release – June 18, 2010, at 8:30 A.M. ET for state personal income, first quarter 2010.