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Economy in Brief

State Personal Income
by Charles Steindel  September 24, 2019

State personal income growth in the second quarter of 2019 was brisk, following even stronger growth in the first quarter (this release contains revisions consistent with the mid-summer revision of GDP). The regional pattern of growth was comparable to that we have seen for employment; the swath of Western states from Washington to Texas all saw annual rates of growth above 6 percent (Texas led all states with a 7.5% annual growth rate). New York and Delaware were the only Eastern states to have growth rates of 6 percent or higher. North Dakota (unchanged), South Dakota (a 1.3% growth rate) and Iowa (a 2.3 percent rate of growth) stand out on the low side. Looking at income components, property income (dividends, rent, and interest) rose substantially faster than wages and proprietors' income. The shift to property types was highly pronounced in New York, which is a key reason the Empire State's overall income was so high compared to its neighbors. Texas' nation-leading pace, though, essentially reflected very rapid growth (7.9% at an annual rate) in labor-type income.

California, Texas, New York, and Florida are the only states with annual rates of personal income above $1 trillion; Pennsylvania is a distant 5th, at around $750 billion, more than $350 billion less than Florida's rate. Other states with incomes above $500 billion are Illinois, New Jersey, Massachusetts, Virginia, Georgia, North Carolina, and Michigan. Washington will quite likely soon become a member of that club. On the flip side, Vermont, both Dakotas, Wyoming, and Alaska report annual rates of personal income less than $50 billion. These enormous discrepancies (California's income is more than 70 times Vermont's) imply that the usual “ranking” of income growth by state is not especially illuminating.

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