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NEWS RELEASE EMBARGOED FOR RELEASE: 8:30 A.M., EDT, WEDNESDAY, JULY 1, 2015 Media: Technical: Jeannine Aversa Eric Figueroa E-mail: rpp@bea.gov (202) 606-2649 (202) 606-5620 BEA 15-32 Real Personal Income for States and Metropolitan Areas, 2013 Real personal income across all regions rose by an average of 0.8 percent in 2013. This growth rate reflects the year-over-year change in nominal personal income across all regions adjusted by the change in the national personal consumption expenditures (PCE) price index. On a nominal basis, personal income across all regions grew an average of 2.0 percent in 2013. In 2013, the U.S. PCE price index grew 1.2 percent. Real Personal Income for States and Metropolitan Areas Growth in real state personal income in 2013 ranged from an increase of 3.5 percent in Idaho to a decline of 4.4 percent in North Dakota. These growth rates reflect the year-over-year change in the state’s nominal personal income, the change in the national PCE price index, and the change in the regional price parity for that state. After Idaho, the states with the largest growth rates were Utah (2.3 percent), California (2.2 percent), Nebraska (2.2 percent), and South Dakota (2.0 percent). After North Dakota, the states with the largest rates of decline were New Mexico (-0.6 percent), New York (-0.4 percent), Maryland (-0.3 percent), and Montana (-0.2 percent). States with growth rates close to the national average were Wyoming (0.8 percent), Oklahoma (0.7 percent), Ohio (0.7 percent), New Hampshire (0.7 percent), and Illinois (0.7 percent). Growth in real metropolitan area personal income in 2013 ranged from an increase of 4.8 percent in Sioux City, IA-NE-SD to a decline of 3.1 percent in New Bern, NC. After Sioux City, IA-NE-SD, the metropolitan areas with the largest growth rates were Janesville-Beloit, WI (4.6 percent), Danville, IL (4.4 percent), Monroe, MI (4.4 percent), and Boise City, ID (3.9 percent). After New Bern, NC, the metropolitan areas with the largest declines were Beckley, WV (-3.0 percent), Fairbanks, AK (-2.9 percent), Peoria, IL (-2.9 percent), and Anniston-OxfordJacksonville, AL (-2.4 percent). Regional Price Parities Regional Price Parities (RPPs) measure the differences in the price levels of goods and services across states and metropolitan areas for a given year. RPPs are expressed as a percentage of the overall national price level for each year, which is equal to 100.0. In 2013, the District of Columbia’s RPP (117.7) was higher than that of any state. The states with the highest RPPs were Hawaii (116.2), New York (115.3), New Jersey (114.5), and California (112.3). Mississippi (86.8), Arkansas (87.5), South Dakota (87.6), Alabama (87.7), and West Virginia (88.4) had the lowest RPPs among the States. States with high (low) RPPs typically have relatively high (low) price levels for rents. States with RPPs closest to the national average price level were Vermont (100.2), Illinois (101.0), Florida (98.8), and Oregon (98.7). In 2013, the metropolitan area with the highest RPP was Urban Honolulu, HI (122.5). Metropolitan areas with RPPs above 120.0 also included New York-Newark-Jersey City, NYNJ-PA (122.3), San Jose-Sunnyvale-Santa Clara, CA (121.3), Bridgeport-Stamford-Norwalk, CT (120.8), Santa Cruz-Watsonville, CA (120.5), and San Francisco-Oakland-Hayward, CA (120.3). The metropolitan area with the lowest RPP was Beckley, WV (78.0), followed by Danville, IL (79.2), Rome, GA (81.3), Jonesboro, AR (81.7), and Valdosta, GA (81.8). 2 3 Technical Note on Regional Price Parities and Implicit Regional Price Deflators Price indexes commonly measure price changes over time. The BEA’s Personal Consumption Expenditure price index and the BLS’ Consumer Price Index (CPI) are two examples. Spatial price indexes measure price level differences across regions for one time period. An example of these type of indexes are purchasing power parities (PPPs), which measure differences in price levels across countries for a given period, and can be used to convert estimates of per capita GDP into comparable levels in a common currency. The regional price parities (RPPs) that BEA has developed compare regions within the United States, but without the need for currency conversion. An implicit regional price deflator (IRPD) can be derived by combining the RPPs and the PCE price index. Regional Price Parities. The RPPs are calculated using price quotes for a wide array of items from the CPI, which are aggregated into broader expenditure categories (such as food, transportation, or education)1. Data on rents are obtained separately from the Census Bureau’s American Community Survey (ACS). The expenditure weights for each category are constructed using CPI expenditure weights, BEA’s Personal Consumption Expenditures, and ACS rents expenditures2. The broader categories and the data on rents are combined with the expenditure weights using a multilateral aggregation method that expresses a region’s price level relative to the US3. For example, if the RPP for area A is 120 and for area B is 90, then on average, prices are 20 percent higher and 10 percent lower than the US average for A and B, respectively. If the Personal Income for area A is $12,000 and for area B is $9,000, then RPP-adjusted incomes are $10,000 ($12,000/1.20) and $10,000 ($9,000/0.90), respectively. In other words, the purchasing power of the two incomes is equivalent when adjusted by their respective RPPs. Implicit Regional Price Deflator. The IRPD is a regional price index derived as the product of two terms: the regional price parity and the US PCE price index. The implicit regional price deflator will equal current dollar personal income divided by real personal income in chained dollars. The growth rate or year-to-year change in the IRPDs is a measure of regional inflation4. 1 The BEA Regional Price Parity statistics are based in part on restricted access Consumer Price Index data from the Bureau of Labor Statistics (BLS). The BEA statistics expressed herein are products of BEA and not BLS. 2 To estimate RPPs, CPI price quotes are quality adjusted and pooled over 5 years. The ACS rents are also quality adjusted and are either annual for states or pooled over 3 years for metropolitan areas. The expenditure weights are specific to each year. 3 The multilateral system that is used is the Geary additive method. Any region or combination of regions may be used as the base or reference region without loss of consistency. 4 The growth rate of the implicit regional price deflators will not necessarily equal the region or metro area price deflators published by the BLS. This is because the CPI deflators are calculated directly while the IRPDs are indirect estimates, and because of differences in the source data and the methodology. For a complete description see the BEA working paper titled “Notes on estimating the Multi-year regional price parities by 16 expenditure categories: 2005-2009” (http://www.bea.gov/papers/pdf/notes_on_estimating_the_multi_year_rpps_and_appendix_tables.pdf) 4 Detailed information on the methodology used to estimate the RPPs may be found in the article, “Real Personal Income and Regional Price Parities for States and Metropolitan Areas, 2008-2012”, in the June 2014 issue of the Survey of Current Business. 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. These are current dollar estimates. Comparisons for different regions and time periods reflect changes in both the price and quantity components of regional personal income. Estimates of personal income in the United States are derived as the sum of the regional estimates. These differ from the estimates of personal income in the national income and product account (NIPAs) because of differences in coverage, in the methodologies used to prepare the estimates, and in the timing of the availability of source data. Regional price parities (RPPs) are regional price levels expressed as a percentage of the overall national price level for a given year. The price level is determined by the average prices paid by consumers for the mix of goods and services consumed in each region. Detailed CPI price data are adjusted to obtain average price levels for BLS-defined areas5. These are allocated to counties in combination with direct price and expenditure data on rents from the ACS. County data are then aggregated to states and metropolitan areas. Personal income at RPPs is current-dollar personal income divided by the price parity6 for a given year and region. A balancing factor is applied so that the sum of personal income at RPPs across regions equals the current dollar sum. Real personal income is personal income at RPPs divided by the national PCE chaintype price index. The result is real personal income in chained dollars (using 2009 as the reference year). Using Alaska in 2013 as an example: (1) Personal Income is divided by the RPP (2) Personal income at RPPs is deflated by the US PCE Price Index 2013 Alaska Real Personal Income $36.9 / 1.060 = $34.8 $34.8 / 1.073 = $32.4 $32.4 Note. Dollar amounts are in billions. 5 The CPI represents about 87 percent of the total U.S. population, including almost all residents of urban or metropolitan areas. In the northeast region, rural area prices (exclusive of Rents) are assumed to be the same as those in the small metropolitan areas of the CPI; in the midwest, south, and west regions, they are assumed to be the same as those in the nonmetropolitan urban areas of the CPI. 6 RPP should first be divided by 100. 5 Estimates of real personal income in the United States are derived as the sum of the regional estimates divided by the U.S. PCE Price Index. Implicit Regional Price Deflator (IRPD) is the product of the RPP times the national PCE price index. It is equal to personal income divided by real personal income. See also the Technical Note. * * * The tables in this press release are also available on the BEA website. Additional tables showing estimates of real income and regional price parities can also be found there for state metropolitan and nonmetropolitan portions, and metropolitan areas. Supplemental tables are available upon request. BEA’s national, international, regional, and industry statistics; 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. Next real personal income release – July 2016 for states, state metropolitan and nonmetropolitan portions, and metropolitan areas. 6 Table 1. Real Personal Income and Implicit Regional Price Deflators by State, 2012-2013 Personal income Millions of dollars 2012 United States Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 13,873,161 173,150 36,447 239,929 107,443 1,805,194 240,350 216,308 40,379 48,109 792,950 369,149 61,968 56,072 592,057 249,326 135,346 125,168 157,043 186,923 52,958 315,776 376,874 381,314 254,870 99,886 240,578 39,357 85,187 108,050 66,155 487,127 74,602 1,059,053 375,683 39,493 464,780 157,971 153,097 581,772 48,584 166,959 38,096 251,752 1,127,675 102,464 27,819 398,812 324,458 65,245 243,148 30,255 2013 14,151,427 176,341 36,867 245,070 108,603 1,856,614 247,069 218,132 41,487 48,697 811,377 378,156 63,468 58,272 605,201 253,779 138,337 128,541 159,172 190,590 54,359 319,125 383,152 386,471 257,466 101,442 245,771 39,963 88,114 109,471 67,513 492,897 74,996 1,070,236 380,954 38,472 474,973 161,188 156,605 590,171 49,410 171,088 38,897 256,969 1,160,079 106,289 28,501 403,425 332,655 65,889 248,335 30,779 Maximum 1,805,194 1,856,614 Minimum 27,819 28,501 Range 1,777,375 1,828,113 Source: U.S. Bureau of Economic Analysis Real personal income Millions of chained (2009) dollars Percent growth 2012 2013 Implicit regional price deflators Percent growth 2.0 1.8 1.2 2.1 1.1 2.8 2.8 0.8 2.7 1.2 2.3 2.4 2.4 3.9 2.2 1.8 2.2 2.7 1.4 2.0 2.6 1.1 1.7 1.4 1.0 1.6 2.2 1.5 3.4 1.3 2.1 1.2 0.5 1.1 1.4 -2.6 2.2 2.0 2.3 1.4 1.7 2.5 2.1 2.1 2.9 3.7 2.5 1.2 2.5 1.0 2.1 1.7 13,080,227 185,633 32,374 231,829 115,748 1,508,765 223,083 187,255 37,503 38,489 757,474 379,388 49,941 56,605 554,793 257,810 142,041 130,578 166,995 193,140 50,914 269,264 333,305 380,625 246,497 109,112 255,656 39,577 88,886 103,388 59,058 401,344 74,070 868,645 387,104 41,074 490,999 165,991 146,536 558,105 46,526 173,613 40,561 262,076 1,104,217 99,613 26,099 365,297 296,951 69,563 246,383 29,729 13,184,554 187,518 32,430 235,490 115,766 1,542,356 225,414 187,451 38,143 38,585 765,662 383,845 50,920 58,586 558,626 258,873 142,922 132,021 166,652 194,937 51,878 268,459 332,925 382,627 246,002 109,003 256,882 39,484 90,810 103,987 59,479 401,477 73,596 865,578 387,429 39,252 494,615 167,222 147,961 558,402 46,971 176,383 41,390 264,634 1,118,896 101,940 26,530 365,386 300,529 69,485 249,190 29,955 0.8 1.0 0.2 1.6 0.0 2.2 1.0 0.1 1.7 0.3 1.1 1.2 2.0 3.5 0.7 0.4 0.6 1.1 -0.2 0.9 1.9 -0.3 -0.1 0.5 -0.2 -0.1 0.5 -0.2 2.2 0.6 0.7 0.0 -0.6 -0.4 0.1 -4.4 0.7 0.7 1.0 0.1 1.0 1.6 2.0 1.0 1.3 2.3 1.6 0.0 1.2 -0.1 1.1 0.8 3.9 -2.6 6.5 1,508,765 26,099 1,482,666 1,542,356 26,530 1,515,826 3.5 -4.4 7.9 2012 106.1 93.3 112.6 103.5 92.8 119.6 107.7 115.5 107.7 125.0 104.7 97.3 124.1 99.1 106.7 96.7 95.3 95.9 94.0 96.8 104.0 117.3 113.1 100.2 103.4 91.5 94.1 99.4 95.8 104.5 112.0 121.4 100.7 121.9 97.0 96.2 94.7 95.2 104.5 104.2 104.4 96.2 93.9 96.1 102.1 102.9 106.6 109.2 109.3 93.8 98.7 101.8 125.0 91.5 33.4 2013 107.3 94.0 113.7 104.1 93.8 120.4 109.6 116.4 108.8 126.2 106.0 98.5 124.6 99.5 108.3 98.0 96.8 97.4 95.5 97.8 104.8 118.9 115.1 101.0 104.7 93.1 95.7 101.2 97.0 105.3 113.5 122.8 101.9 123.6 98.3 98.0 96.0 96.4 105.8 105.7 105.2 97.0 94.0 97.1 103.7 104.3 107.4 110.4 110.7 94.8 99.7 102.8 126.2 93.1 33.1 Percent growth 1.2 0.8 1.0 0.6 1.1 0.6 1.7 0.7 1.0 1.0 1.2 1.3 0.5 0.4 1.5 1.4 1.6 1.6 1.6 1.0 0.7 1.4 1.8 0.8 1.2 1.7 1.7 1.8 1.2 0.7 1.3 1.2 1.2 1.4 1.3 1.9 1.4 1.3 1.3 1.4 0.7 0.9 0.1 1.1 1.5 1.4 0.8 1.1 1.3 1.1 1.0 1.0 1.9 0.1 1.9 Table 2. Real Per Capita Personal Income by State, 2012-2013 Per capita personal income Real per capita personal income Dollars Chained (2009) dollars 2012 2013 Percent growth 2012 United States Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 44,200 35,942 49,906 36,624 36,423 47,505 46,315 60,223 44,031 75,950 41,041 37,229 44,578 35,142 46,009 38,136 44,014 43,380 35,857 40,617 39,863 53,659 56,713 38,585 47,377 33,446 39,933 39,142 45,914 39,229 50,056 54,932 35,805 54,099 38,538 56,310 40,230 41,399 39,258 45,577 46,257 35,347 45,676 39,002 43,271 35,891 44,443 48,715 47,055 35,140 42,475 52,469 44,765 36,481 50,150 36,983 36,698 48,434 46,897 60,658 44,815 75,329 41,497 37,845 45,204 36,146 46,980 38,622 44,763 44,417 36,214 41,204 40,924 53,826 57,248 39,055 47,500 33,913 40,663 39,366 47,157 39,235 51,013 55,386 35,965 54,462 38,683 53,182 41,049 41,861 39,848 46,202 46,989 35,831 46,039 39,558 43,862 36,640 45,483 48,838 47,717 35,533 43,244 52,826 1.3 1.5 0.5 1.0 0.8 2.0 1.3 0.7 1.8 -0.8 1.1 1.7 1.4 2.9 2.1 1.3 1.7 2.4 1.0 1.4 2.7 0.3 0.9 1.2 0.3 1.4 1.8 0.6 2.7 0.0 1.9 0.8 0.4 0.7 0.4 -5.6 2.0 1.1 1.5 1.4 1.6 1.4 0.8 1.4 1.4 2.1 2.3 0.3 1.4 1.1 1.8 0.7 41,674 38,533 44,330 35,388 39,239 39,704 42,988 52,135 40,895 60,763 39,205 38,262 35,927 35,476 43,113 39,434 46,192 45,255 38,129 41,968 38,325 45,755 50,156 38,515 45,820 36,536 42,436 39,360 47,908 37,536 44,687 45,259 35,550 44,373 39,710 58,564 42,500 43,501 37,575 43,723 44,298 36,756 48,631 40,601 42,371 34,892 41,695 44,621 43,066 37,467 43,040 51,557 Maximum Minimum Range 75,950 33,446 42,504 75,329 33,913 41,416 2.9 -5.6 8.4 60,763 34,892 25,871 Source: U.S. Bureau of Economic Analysis 2013 41,706 38,794 44,114 35,537 39,119 40,236 42,786 52,126 41,202 59,688 39,159 38,415 36,267 36,340 43,364 39,397 46,247 45,619 37,916 42,144 39,056 45,280 49,744 38,666 45,385 36,441 42,501 38,895 48,600 37,269 44,942 45,113 35,293 44,047 39,341 54,261 42,747 43,428 37,648 43,715 44,670 36,940 48,989 40,738 42,305 35,141 42,337 44,233 43,109 37,473 43,392 51,410 59,688 35,141 24,547 Percent growth 0.1 0.7 -0.5 0.4 -0.3 1.3 -0.5 0.0 0.8 -1.8 -0.1 0.4 0.9 2.4 0.6 -0.1 0.1 0.8 -0.6 0.4 1.9 -1.0 -0.8 0.4 -0.9 -0.3 0.2 -1.2 1.4 -0.7 0.6 -0.3 -0.7 -0.7 -0.9 -7.3 0.6 -0.2 0.2 0.0 0.8 0.5 0.7 0.3 -0.2 0.7 1.5 -0.9 0.1 0.0 0.8 -0.3 2.4 -7.3 9.8 Table 3. Regional Price Parities by State, 2013 Regional price parities Services All items Goods Rents Other Alabama 87.7 96.4 63.4 93.4 Alaska 106.0 101.9 138.8 98.2 Arizona 97.1 99.5 91.5 97.9 Arkansas 87.5 95.3 62.9 92.9 California 112.3 103.0 146.1 105.7 Colorado 102.2 101.4 109.5 99.4 Connecticut 108.5 104.3 116.1 109.0 Delaware 101.4 101.4 97.8 103.8 District of Columbia 117.7 107.9 157.0 110.2 Florida 98.8 98.2 104.5 96.2 Georgia 91.9 96.8 79.3 93.9 Hawaii 116.2 108.3 158.7 102.8 Idaho 92.8 98.5 76.4 96.4 Illinois 101.0 101.4 100.8 100.8 Indiana 91.4 97.0 76.0 94.2 Iowa 90.3 94.5 76.0 91.6 Kansas 90.8 95.5 76.6 92.7 Kentucky 89.1 94.9 69.4 92.9 Louisiana 91.2 96.6 76.8 93.5 Maine 97.7 98.1 97.6 97.4 Maryland 110.9 104.0 125.9 109.2 Massachusetts 107.3 99.1 123.7 108.7 Michigan 94.2 98.0 82.2 97.0 Minnesota 97.6 99.4 95.6 96.6 Mississippi 86.8 94.7 63.8 92.6 Missouri 89.2 94.1 75.4 91.3 Montana 94.4 98.7 83.3 95.0 Nebraska 90.5 95.2 75.9 92.1 Nevada 98.2 97.6 96.9 99.7 New Hampshire 105.9 98.8 122.7 105.6 New Jersey 114.5 102.2 135.4 115.9 New Mexico 95.0 98.0 83.4 98.5 New York 115.3 107.7 135.8 112.5 North Carolina 91.7 96.5 79.6 93.5 North Dakota 91.4 94.3 82.6 91.4 Ohio 89.6 95.5 73.8 91.9 Oklahoma 89.9 95.9 70.7 93.2 Oregon 98.7 98.6 99.5 98.5 Pennsylvania 98.6 99.6 90.7 101.6 Rhode Island 98.1 98.0 100.1 97.1 South Carolina 90.5 96.7 75.5 93.6 South Dakota 87.6 94.1 66.6 91.1 Tennessee 90.6 96.4 75.1 93.4 Texas 96.7 97.5 90.3 99.2 Utah 97.2 97.8 92.9 99.0 Vermont 100.2 98.0 113.2 97.0 Virginia 103.0 100.4 113.8 100.4 Washington 103.2 102.9 110.9 99.9 West Virginia 88.4 95.5 63.0 94.1 Wisconsin 92.9 95.8 86.2 92.8 Wyoming 95.8 98.6 89.7 95.4 All States 100.0 Maximum 117.7 Minimum 86.8 Range 30.9 Source: U.S. Bureau of Economic Analysis 99.4 108.3 94.1 14.2 101.1 158.7 62.9 95.8 100.1 115.9 91.1 24.8