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EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Thursday, July 7, 2016 BEA 16-36 Technical: Eric Figueroa 301.278.9328 rpp@bea.gov Media: Jeannine Aversa 301.278.9003 Jeannine.aversa@bea.gov Real Personal Income for States and Metropolitan Areas, 2014 Real personal income across all regions rose by an average of 2.9 percent in 2014. 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 4.4 percent in 2014. In 2014, the U.S. PCE price index grew 1.4 percent. Real Personal Income for States and Metropolitan Areas Growth in real state personal income in 2014 ranged from 4.7 percent in Nevada to 0.4 percent in South Dakota (table 1). 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 state’s regional price parity. After Nevada, the states with the highest growth rates were Colorado (4.5 percent), Texas (4.2 percent), Washington (4.0 percent), and Oregon (4.0 percent). After South Dakota, the states with the slowest rates of growth were Kansas (0.5 percent), West Virginia (0.7 percent), Illinois (1.0 percent), and Vermont (1.3 percent). States with growth rates close to the national average were Alaska (3.1 percent), Oklahoma (3.1 percent), Michigan (2.9 percent), New Jersey (2.9 percent), Massachusetts (2.8 percent), Connecticut (2.8 percent), and Tennessee (2.8 percent). Growth in real metropolitan area personal income in 2014 ranged from an increase of 8.1 percent in Odessa, TX to a decline of 3.9 percent in Danville, IL. After Odessa, TX, the metropolitan areas with the largest growth rates were Hanford-Corcoran, CA (7.0 percent), Midland, TX (7.0 percent), Myrtle BeachConway-North Myrtle Beach, SC-NC (6.0 percent), Salem, OR (5.8 percent), and Beaumont-Port Arthur, TX (5.6 percent). After Danville, IL, the metropolitan areas with the largest declines were Beckley, WV (-3.3 percent), Bloomington, IL (-3.2 percent), Grand Forks, ND-MN (-1.4 percent), Peoria, IL (-1.1 percent), and Yuma, AZ (-1.1 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. In 2014, the District of Columbia’s RPP (118.1) was higher than that of any state (table 3). The states with the highest RPPs were Hawaii (116.8), New York (115.7), New Jersey (114.5), and California (112.4). Mississippi (86.7), Arkansas (87.5), Alabama (87.8), South Dakota (88.0), and Kentucky (88.7) had the lowest RPPs among the states. States with high (low) RPPs typically have high (low) price levels for rents. States with RPPs closest to the national average price level were Vermont (101.2), Illinois (100.7), Florida (99.1), Oregon (99.0), and Rhode Island (98.7). In 2014, the metropolitan area with the highest RPP was Urban Honolulu, HI (123.5). Metropolitan areas with RPPs above 120.0 also included San Jose-Sunnyvale-Santa Clara, CA (122.9), New York-NewarkJersey City, NY-NJ-PA (122.3), Santa Cruz-Watsonville, CA (121.8), San Francisco-Oakland-Hayward, CA (121.3), and Bridgeport-Stamford-Norwalk, CT (120.4). The metropolitan area with the lowest RPP was Beckley, WV (79.7), followed by Rome, GA (80.7), Danville, IL (81.1), Morristown, TN (81.9), and Jonesboro, AR (82.0). Additional tables showing estimates of real personal income and regional price parities for state metropolitan and nonmetropolitan portions, and metropolitan areas can be found at www.bea.gov/regional/index.htm. Supplemental tables are available upon request. . -2- -3- Technical Notes 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 U.S. 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 U.S3. 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 U.S. 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 U.S. 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. Detailed information on the methodology used to estimate the RPPs may be found on the regional methodology page of the BEA website: www.bea.gov/regional/methods.cfm. 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 for 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. -4- BEA’s national, international, regional, and industry statistics; the Survey of Current Business; and BEA news releases are available without charge on BEA’s website 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 2017 for states, state metropolitan and nonmetropolitan portions, and metropolitan areas. Additional Information 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. County data are then aggregated to states and metropolitan areas. Personal income at RPPs is current-dollar personal 6 income divided by the price parity 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. 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 accounts (NIPAs) because of differences in coverage, in the methodologies used to prepare the estimates, and in the timing of the availability of source data. Real personal income is personal income at RPPs divided by the national PCE chain-type price index. The result is real personal income in chained dollars (using 2009 as the reference year). Using Alaska in 2014 as an example: (1) Personal Income is divided by the RPP 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. $39.8 / 1.057 = $37.6 (2) Personal Income at RPPs is deflated by the U.S. PCE Price Index $37.6 / 1.091 = $34.5 2014 Alaska Real Personal Income $34.5 Detailed CPI price data are adjusted to obtain 5 average price levels for BLS-defined areas . These are allocated to counties in combination with direct price and expenditure data on rents from the ACS. Note: Dollar amounts are in billions. 5 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. 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. The CPI represents about 89 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 -5- RPP should first be divided by 100. Table 1. Real Personal Income and Implicit Regional Price Deflators by State, 2013-2014 Personal income Millions of dollars 2013 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 14,064,468 174,877 37,791 243,657 108,081 1,849,505 246,448 223,561 41,468 44,533 809,665 375,758 62,437 57,484 599,119 251,599 135,242 128,315 158,238 188,965 52,566 312,054 379,381 387,978 257,058 100,626 243,592 39,462 86,447 109,490 66,839 491,865 73,571 1,055,803 372,031 39,358 471,547 161,686 154,869 588,296 48,607 169,269 37,855 255,422 1,161,134 106,073 28,108 404,886 331,031 65,178 245,438 30,206 2014 14,683,147 181,909 39,793 255,093 112,076 1,939,528 261,735 233,293 43,392 46,016 850,178 393,594 65,348 60,041 613,672 261,092 139,625 130,364 165,044 195,426 54,195 323,778 396,206 403,726 267,389 103,091 252,482 40,844 89,479 115,672 70,020 515,020 77,356 1,098,103 389,513 41,265 489,695 169,228 163,653 609,679 51,027 177,242 38,631 264,965 1,231,085 110,842 29,090 419,185 350,322 66,857 254,405 31,885 Maximum 1,849,505 1,939,528 Minimum 28,108 29,090 Range 1,821,398 1,910,438 Source: U.S. Bureau of Economic Analysis Real personal income Millions of chained (2009) dollars Percent growth 2013 2014 Implicit regional price deflators Percent growth 4.4 4.0 5.3 4.7 3.7 4.9 6.2 4.4 4.6 3.3 5.0 4.7 4.7 4.4 2.4 3.8 3.2 1.6 4.3 3.4 3.1 3.8 4.4 4.1 4.0 2.4 3.6 3.5 3.5 5.6 4.8 4.7 5.1 4.0 4.7 4.8 3.8 4.7 5.7 3.6 5.0 4.7 2.0 3.7 6.0 4.5 3.5 3.5 5.8 2.6 3.7 5.6 13,074,510 185,465 33,500 234,753 114,713 1,527,644 225,442 191,439 38,224 35,231 761,000 380,077 49,407 57,701 553,566 256,028 139,133 131,208 165,170 192,829 49,894 263,303 330,207 382,519 245,194 107,630 252,926 39,016 88,795 103,727 58,959 400,949 72,091 851,321 377,386 39,996 490,995 167,240 145,945 555,030 45,969 174,068 40,124 262,264 1,121,730 101,508 26,049 366,411 297,835 68,520 244,961 29,419 13,457,845 190,171 34,542 242,833 117,558 1,583,118 235,538 196,749 39,071 35,765 786,786 392,474 51,354 58,997 559,163 262,222 141,927 131,904 170,729 196,248 51,230 269,226 339,496 393,741 251,362 109,092 259,037 39,803 90,608 108,602 61,050 412,540 74,698 871,141 389,649 41,388 503,038 172,374 151,720 569,724 47,425 179,763 40,300 269,504 1,168,858 104,881 26,378 374,847 309,793 69,014 250,000 30,411 2.9 2.5 3.1 3.4 2.5 3.6 4.5 2.8 2.2 1.5 3.4 3.3 3.9 2.2 1.0 2.4 2.0 0.5 3.4 1.8 2.7 2.2 2.8 2.9 2.5 1.4 2.4 2.0 2.0 4.7 3.5 2.9 3.6 2.3 3.2 3.5 2.5 3.1 4.0 2.6 3.2 3.3 0.4 2.8 4.2 3.3 1.3 2.3 4.0 0.7 2.1 3.4 6.2 1.6 4.6 1,527,644 26,049 1,501,595 1,583,118 26,378 1,556,740 4.7 0.4 4.3 2013 107.6 94.3 112.8 103.8 94.2 121.1 109.3 116.8 108.5 126.4 106.4 98.9 126.4 99.6 108.2 98.3 97.2 97.8 95.8 98.0 105.4 118.5 114.9 101.4 104.8 93.5 96.3 101.1 97.4 105.6 113.4 122.7 102.1 124.0 98.6 98.4 96.0 96.7 106.1 106.0 105.7 97.2 94.3 97.4 103.5 104.5 107.9 110.5 111.1 95.1 100.2 102.7 126.4 93.5 32.9 2014 109.1 95.7 115.2 105.0 95.3 122.5 111.1 118.6 111.1 128.7 108.1 100.3 127.3 101.8 109.7 99.6 98.4 98.8 96.7 99.6 105.8 120.3 116.7 102.5 106.4 94.5 97.5 102.6 98.8 106.5 114.7 124.8 103.6 126.1 100.0 99.7 97.3 98.2 107.9 107.0 107.6 98.6 95.9 98.3 105.3 105.7 110.3 111.8 113.1 96.9 101.8 104.8 128.7 94.5 34.2 Percent growth 1.4 1.4 2.1 1.2 1.2 1.2 1.7 1.5 2.4 1.8 1.6 1.4 0.7 2.2 1.4 1.3 1.2 1.1 0.9 1.6 0.4 1.5 1.6 1.1 1.5 1.1 1.2 1.5 1.4 0.9 1.2 1.8 1.5 1.6 1.4 1.3 1.4 1.5 1.6 1.0 1.8 1.4 1.6 0.9 1.7 1.1 2.2 1.2 1.7 1.8 1.6 2.1 2.4 0.4 2.0 Table 2. Real Per Capita Personal Income by State, 2013-2014 Per capita personal income Real per capita personal income Dollars Chained (2009) dollars 2013 2014 Percent growth 2013 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 44,438 36,176 51,259 36,723 36,529 48,125 46,746 62,112 44,819 68,606 41,309 37,596 44,314 35,641 46,477 38,291 43,735 44,311 35,967 40,819 39,562 52,545 56,549 39,197 47,410 33,629 40,297 38,884 46,254 39,223 50,535 55,194 35,254 53,606 37,774 54,373 40,749 41,962 39,426 46,028 46,145 35,472 44,772 39,312 43,807 36,542 44,839 48,956 47,468 35,163 42,737 51,791 46,049 37,512 54,012 37,895 37,782 49,985 48,869 64,864 46,378 69,838 42,737 38,980 46,034 36,734 47,643 39,578 44,937 44,891 37,396 42,030 40,745 54,176 58,737 40,740 48,998 34,431 41,639 39,903 47,557 40,742 52,773 57,620 37,091 55,611 39,171 55,802 42,236 43,637 41,220 47,679 48,359 36,677 45,279 40,457 45,669 37,664 46,428 50,345 49,610 36,132 44,186 54,584 3.6 3.7 5.4 3.2 3.4 3.9 4.5 4.4 3.5 1.8 3.5 3.7 3.9 3.1 2.5 3.4 2.7 1.3 4.0 3.0 3.0 3.1 3.9 3.9 3.3 2.4 3.3 2.6 2.8 3.9 4.4 4.4 5.2 3.7 3.7 2.6 3.7 4.0 4.5 3.6 4.8 3.4 1.1 2.9 4.2 3.1 3.5 2.8 4.5 2.8 3.4 5.4 41,310 38,367 45,438 35,381 38,771 39,750 42,761 53,187 41,312 54,275 38,826 38,028 35,065 35,776 42,944 38,965 44,993 45,310 37,542 41,654 37,551 44,336 49,219 38,645 45,222 35,970 41,841 38,445 47,510 37,158 44,578 44,992 34,545 43,224 38,318 55,254 42,430 43,404 37,154 43,425 43,641 36,477 47,456 40,365 42,320 34,969 41,555 44,304 42,708 36,966 42,654 50,442 Maximum Minimum Range 68,606 33,629 34,976 69,838 34,431 35,407 5.4 1.1 4.3 55,254 34,545 20,710 Source: U.S. Bureau of Economic Analysis 2014 42,207 39,216 46,886 36,074 39,630 40,799 43,978 54,703 41,760 54,280 39,550 38,869 36,176 36,096 43,411 39,750 45,678 45,421 38,684 42,207 38,516 45,048 50,330 39,732 46,061 36,436 42,720 38,886 48,157 38,252 46,013 46,155 35,817 44,117 39,184 55,969 43,387 44,449 38,214 44,554 44,946 37,199 47,235 41,150 43,360 35,639 42,099 45,020 43,871 37,298 43,421 52,059 55,969 35,639 20,330 Percent growth 2.2 2.2 3.2 2.0 2.2 2.6 2.8 2.9 1.1 0.0 1.9 2.2 3.2 0.9 1.1 2.0 1.5 0.2 3.0 1.3 2.6 1.6 2.3 2.8 1.9 1.3 2.1 1.1 1.4 2.9 3.2 2.6 3.7 2.1 2.3 1.3 2.3 2.4 2.9 2.6 3.0 2.0 -0.5 1.9 2.5 1.9 1.3 1.6 2.7 0.9 1.8 3.2 3.7 -0.5 4.1 Table 3. Regional Price Parities by State, 2014 Regional price parities Services All items Goods Rents Other Alabama 87.8 96.3 63.6 93.8 Alaska 105.7 101.0 144.1 97.1 Arizona 96.4 98.5 91.1 97.3 Arkansas 87.5 95.1 62.5 93.5 California 112.4 103.0 147.7 105.6 Colorado 102.0 100.4 111.0 99.0 Connecticut 108.8 104.3 116.9 109.3 Delaware 101.9 100.4 101.6 103.6 District of Columbia 118.1 107.6 162.5 109.4 Florida 99.1 98.3 104.9 96.7 Georgia 92.0 96.8 78.7 94.7 Hawaii 116.8 108.9 158.4 103.6 Idaho 93.4 98.1 79.2 96.2 Illinois 100.7 101.2 99.6 100.7 Indiana 91.4 97.3 75.4 94.1 Iowa 90.3 95.1 74.9 91.6 Kansas 90.7 95.7 75.5 92.8 Kentucky 88.7 94.6 67.8 93.4 Louisiana 91.4 96.5 77.5 93.8 Maine 97.1 98.1 93.0 97.9 Maryland 110.3 104.0 126.6 107.5 Massachusetts 107.1 100.3 123.5 106.7 Michigan 94.1 97.9 82.1 96.8 Minnesota 97.6 100.1 95.7 95.7 Mississippi 86.7 94.4 63.2 93.4 Missouri 89.4 95.0 74.3 91.6 Montana 94.2 98.4 83.6 94.4 Nebraska 90.6 95.6 75.8 92.1 Nevada 97.7 97.2 94.6 100.4 New Hampshire 105.2 99.7 119.9 104.3 New Jersey 114.5 102.3 136.7 115.4 New Mexico 95.0 97.6 83.6 98.8 New York 115.7 108.2 136.6 112.5 North Carolina 91.7 96.3 79.5 93.8 North Dakota 91.5 94.9 81.9 91.4 Ohio 89.3 95.6 72.9 91.7 Oklahoma 90.1 95.7 71.2 93.7 Oregon 99.0 98.8 100.7 98.3 Pennsylvania 98.2 99.6 89.0 101.7 Rhode Island 98.7 98.0 102.0 97.6 South Carolina 90.5 96.6 75.4 93.8 South Dakota 88.0 94.6 67.1 91.2 Tennessee 90.2 96.2 73.6 93.8 Texas 96.6 97.0 91.1 99.2 Utah 97.0 97.5 91.6 99.4 Vermont 101.2 98.0 118.4 97.5 Virginia 102.6 100.2 112.1 100.4 Washington 103.8 103.3 112.3 100.3 West Virginia 88.9 95.1 64.5 94.8 Wisconsin 93.4 95.8 86.6 93.8 Wyoming 96.2 98.3 93.3 95.0 All States 100.0 Maximum 118.1 Minimum 86.7 Range 31.3 Source: U.S. Bureau of Economic Analysis 99.4 108.9 94.4 14.5 101.1 162.5 62.5 100.0 100.1 115.4 91.2 24.2
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