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Economy in Brief

State Personal Income
by Charles Steindel  April 8, 2019

State incomes grew strongly in the fourth quarter of 2018, according to recently released BEA data. South Dakota, Iowa, and Nebraska, reported double-digit annualized growth rates. New York had the lowest rate of growth, but even there the 2.8% mark was not remarkably low, as these quarterly figures go (New York was so low due to an odd plunge in transfer receipts; large gains in farm income helped the Plains states).

Growth was generally stronger in the western half of the nation. Louisiana, at a healthy 4.5%, was the only state between the Mississippi and the Pacific to clock a growth rate under 5% (Alaska and Hawaii were both around 3 ½%). While the East, aside perhaps from the New York anomaly, wasn’t truly weak in any absolute sense (Maine, Rhode Island, Maryland and DC all had growth rates under 4%), the two fastest growing states in that part of the country, Mississippi and Delaware, came in at 5.9%. Eleven states west of the Mississippi River met or exceeded that mark.

The release also reported the figures for 2018 as a whole. The range was much narrower than for the often-erratic quarterly figures. Washington State, though, was the clear leader, with a 6.3% gain in income. Utah, at 6.3%, was the runner-up. Every other state had growth figures from 2.9% (Hawaii) to 5.7% (Nevada and Colorado). Again, growth was typically stronger in the West—Florida was the only eastern state above 5%.

The per capita income numbers for 2018 show that there is considerable dispersion of income across the nation. The two coasts are much more affluent than the Southeast and Southwest, with Virginia the only state in those huge areas to have income above the national average (yes, even Texas was under the national figure). Per capita income in Connecticut ($74,561, 39% above the national average of $53,712) was nearly twice as high as Mississippi ($37,994, 29% under the national average). Of course, the averages conceal considerable disparity within states; obviously Connecticut’s number is boosted substantially by Fairfield County (and New York’s $68,667 figure, and rank of number 3, owes a lot to Manhattan).

Of course, looking at median measures, or income per household, or adjusting for price differentials, can alter one’s impression of dispersion across the nation. For example, Delaware is a bit below the national average in personal income per capita, but the Census Bureau reports that it was actually number 1 in 2017 when the measure is median income per household. However, such adjustments don’t appear to drastically change the overall picture of regional disparities.

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