State personal income dropped an average 1.7 percent in 2009, according to estimates released March 25 by the U.S. Bureau of Economic Analysis.
The annual percentage change in state personal income ranged from minus-4.8 percent in Nevada to 2.1 percent in West Virginia, one of six states with a personal income gain in 2009, the Bureau said in a release. Inflation as measured by the national price index for personal consumption expenditures fell to 0.2 percent in 2009 from 3.3 percent in 2008.
Idaho per-capita personal income in 2009 ranked 47th at $31,632 – down 4.1 percent from $32,994 in 2008, when the state ranked 44th. Idaho’s year-to-year decline was lower than all but those seen in South Dakota (48th), Nevada (49th) and Wyoming.
Idaho personal income in 2009 was $48,898,000 overall, which was down 3 percent from 2008, Idaho Department of Labor spokesman Bob Fick said in an interview. In the fourth quarter, Idaho personal income rose 1.2 percent (annualized) from the third quarter, to $49.3 billion. The fourth-quarter personal income figure was 1.6 percent below the year-earlier figure.
“The important part of the fourth quarter is that it ends a five-quarter string of no growth or declines,” he said. The third and fourth quarters of 2008 and the first quarter of 2009 were all lower than the previous quarter. Last year’s second and third quarters were flat.
“It shows some growth, and it’s another indication that the Idaho economy very likely bottomed out at the end of 2009 and the beginning of 2010,” Fick said. Half the increase in Idaho personal income in the fourth quarter, from the previous quarter, came in the form of wages and profits. The fourth quarter of 2009 posted an increase of $249 million (annualized) in paychecks and business profits from the previous quarter – the largest quarterly gain since the fourth quarter of 2007, he said.
The Bureau of Economic Analysis said that 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, the Bureau of Economic Analysis said in a release. Net earnings, which declined 3.7 percent nationally in 2009, rose by 0.7 percent in Maryland, 0.7 percent in West Virginia and 0.3 percent in Virginia. Bureau officials said 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 by 0.1 percent and 0.5 percent, respectively.
Increased transfer receipts in the other three states with personal income gains in 2009 – Maine, Kentucky and Hawaii – were sufficient to offset declines in both property income and net earnings.
The Bureau said that 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 that includes casino hotels, the Bureau said. 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.
Per capita personal income (personal income divided by population) fell 2.6 percent nationally in 2009 after rising 2 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.
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.
Health care made the largest contribution to fourth-quarter personal income growth nationally, the Bureau of Labor Statistics said. 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 10 fastest-growing states in the fourth quarter – South Dakota, North Dakota, Iowa, Nebraska and Kansas – are in the Plains region. Their strong performance reflected the farm sector; nonfarm personal income growth in these states was at or below the national average.
The Bureau said quarter-to-quarter percentage 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.