Recent Updates

  • Markit PMI: Manufacturing Survey - Australia (Sep)
  • Euro area: Flash Consumer Confidence (Oct), ECB Banking Lending Survey (Q4)
  • US: Philadelphia Fed Nonmfg Business Outlook (Oct); Richmond Fed Mfg & Service Sector Surveys (Oct)
  • Spain: Bank Lending Survey (Q4), International Trade Summary, Construction Permits (Aug)
  • Macao: Visitor Arrivals (Sep)
  • Singapore: Housing & Development Board Annual Report (2017)
  • more updates...

Economy in Brief

State Personal Income
by Charles Steindel  September 26, 2018

Yesterday BEA released its estimates of personal income at the state level for 2018:Q2. The numbers reflect the benchmark GDP revision. Income growth is rather dispersed. In the second quarter Texas led the nation, with a 6.0% growth rate (the national figure was 4.2%). Bringing up the rear was, surprisingly, Washington (state) with a meager 1.6% rate of growth. However, quarterly movements can be highly erratic—Washington’s weak second quarter followed outsized gains in both 2017:Q4 and 2018:Q1 (7.6% and 10.0%, respectively). Most likely the second quarter softness—largely due to a -.6 percentage point contribution from earnings in the professional, scientific, and technical services sector—was merely a correction following large year-end bonuses at some of the technology firms in the state.

Looking at the more stable four quarter growth rates, the Southwest and Rocky Mountain regions led, with the Plains well behind . Utah had the highest growth rate over the last year (6.7%)—and Washington was second, at 6.2%. The five slowest growing states were in the Plains: North Dakota, Kansas, South Dakota, Iowa, and at the bottom, Nebraska, which reported a gain of only 1.9%.

To reiterate, these are second quarter figures—the move to convergence in employment growth has been more evident in the monthly data from the summer. Moreover, personal income growth will be influenced by growth in average wages, which may accentuate or attenuate differences in employment growth. Finally, of course, growth in the nonwage components of income can diverge (and differences in population growth may also be reflected in aggregate income growth). An interested example that shows how large surface differences in labor markets may not be reflected in income is Alaska and Hawaii. Alaska has had the highest unemployment rate in the nation, and Hawaii the lowest. Yet, from 2017:Q2 to 2018:Q2 personal income in Alaska rose a tad more than Hawaii (3.3% vs. 3.2%--both well under the 4.6% national pace).

close
large image