Vermont ranks in top three for personal income growth

Vermont Business Magazine Another economic data point ranks Vermont among the best in the nation. State personal income increased 0.8 percent on average in the US in the first quarter of 2014, an acceleration from the 0.5 percent growth in the fourth quarter of 2013, according to estimates released Tuesday by the US Bureau of Economic Analysis. Personal income grew in 46 states and growth accelerated in 24 of those states. The fastest growth, 1.4 percent, was in Washington state, Vermont, and West Virginia. Personal income fell 2.9 percent in North Dakota, 0.3 percent in South Dakota, and 0.2 percent in Arkansas and Nebraska. Inflation, as measured by the national price index for personal consumption expenditures, was 0.3 percent in the first quarter, the same as in the fourth quarter. Meanwhile, Vermont's unemployment rate is second lowest in the nation at 3.3 percent (behind only North Dakota) and Vermont is at its highest per capita income ($45,783)and rank (19th) since statistics were first compiled in 1929 (see table below).

RELATED:Vermont unemployment rate holds steady at 3.3 percent in May

Personal current transfer receipts.Nationally, personal current transfer receipts increased $41.1 billion in the first quarter of 2014, compared with an increase of $4.3 billion in the fourth quarter of 2013. The first-quarter estimates of current transfer receipts reflected several special factors. Social security benefits, which increased $15.5 billion, were boosted by a 1.5 percent cost-of-living adjustment. Medicaid benefits, which increased $22.3 billion, were boosted by expanded coverage under the Affordable Care Act (ACA). Other current transfer receipts increased $16.7 billion, reflecting increases in several refundable tax credits, including health insurance premium subsidies paid in the form of tax credits to enrollees of the ACA exchanges. For additional information, see the FAQ on "How will the Affordable Care Act affect BEA’s measure of personal income and outlays?" at www.bea.gov. These increases in current transfer receipts were partly offset by a $16.8 billion decrease in state unemployment insurance (UI) benefits, reflecting the expiration of the Emergency Unemployment Compensation program.

Earnings by state and industry.Overall, earnings grew $79.5 billion in the first quarter of 2014, after increasing $75.1 billion in the fourth quarter of 2013. Earnings grew in 19 of the 24 industries for which BEA prepares quarterly estimates, with the largest increases in professional services ($22.1 billion), construction ($19.4 billion), and finance ($9.2 billion).

Mining earnings grew $8.6 billion in the first quarter, compared with a $2.5 billion increase in the fourth quarter. More than half of the mining earnings growth (which includes earnings in the oil and gas industry) was in Texas. The contribution of mining to earnings growth was larger than every other industry in eight states including Texas, North Dakota, and West Virginia.

Construction earnings grew $19.4 billion in the first quarter, more than double the $9.5 billion fourth-quarter increase. More than one-fourth of this growth was in Texas and California. Construction made a larger contribution to earnings growth than any other industry in 20 states including Nevada and Utah.

Earnings fell in five industries: farming ($16.4 billion), information ($9.2 billion), management of companies ($2.6 billion), durable goods manufacturing ($1.7 billion), and forestry ($0.1 billion).

About half of the first-quarter farm earnings decline was in, or adjacent to, the Plains region. First-quarter farm earnings declined more than $1 billion in North Dakota, Minnesota, Iowa, Arkansas, and Nebraska. The declines reflect falling crop prices.

Information earnings fell $9.2 billion in the first quarter after rising $14.3 billion in the fourth quarter. Earnings declined $11.1 billion in six states and grew $1.9 billion elsewhere. California’s $11.0 billion first-quarter decline followed a $15.5 billion fourth-quarter increase that included special lump-sum bonuses.

Durable goods manufacturing earnings fell $1.7 billion in the first quarter, following a $2.2 billion increase in the fourth quarter. Bonuses and other special pay contributed to a $1.4 billion first-quarter rise in Washington, the first increase in that state in a year.

Definitions

Personal incomeis 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.Property incomeis rental income of persons, personal dividend income, and personal interest income.Net earningsis earnings by place of work (the sum of wages and salaries, supplements to wages and salaries, and proprietors’ income) less contributions for government social insurance, plus an adjustment to convert earnings by place of work to a place-of-residence basis. Personal income is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars (no adjustment is made for price changes).

The estimate of personal income in the United States is derived as the sum of the state estimates and the estimate for the District of Columbia; it differs from the estimate 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.

BEA groups all 50 states and the District of Columbia into eight distinct regions for purposes of data collecting and analyses:New England(Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont);Mideast(Delaware, District of Columbia, Maryland, New Jersey, New York, and Pennsylvania);Great Lakes(Illinois, Indiana, Michigan, Ohio, and Wisconsin);Plains(Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota);Southeast(Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia);Southwest(Arizona, New Mexico, Oklahoma, and Texas);Rocky Mountain(Colorado, Idaho, Montana, Utah, and Wyoming); andFar West(Alaska, California, Hawaii, Nevada, Oregon, and Washington).

State personal income statistics provide a framework for analyzing current economic conditions in each state and can serve as a basis for decision making. For example:

Federal government agencies use the statistics as a basis for allocating funds and determining matching grants to states. The statistics are also used in forecasting models to project energy and water use.

• State governments use the statistics to project tax revenues and the need for public services.
• Academic regional economists use the statistics for applied research.
• Businesses, trade associations, and labor organizations use the statistics for market research.

BEA's national, international, regional, and industry estimates; theSurvey of Current Business; and BEA news releases are available without charge on BEA's Web site atwww.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements.

Revisions.Estimates for 2013:I to 2013:IV have been revised. All of the regional statistics underlying this news release, along with mapping and charting applications, are available athttp://bea.gov/regional/

NOTE.— Quarter-to-quarter percent 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.