The current economic expansion, one of the nation’s longest, has increased personal income in all states above pre-recession levels, according to a recent report from Pew Charitable Trusts. However, the gains have been uneven, ranging from a constant annual rate of 4.2% in North Dakota, to 0.7% in Illinois.
Since the recession began in December 2007, national growth in personal income has been lower than its historical pace. Estimated U.S. personal income increased by the equivalent of 1.7% a year from the fourth quarter of 2007 through the first quarter of 2017, compared with the equivalent of 2.7% a year over the past 30 years, after accounting for inflation.
Only in mid-2015 did the final state—Nevada—recoup its personal income losses and return to its pre-recession level, again after accounting for inflation. The recession ended in June 2009.
Though North Dakota led the nation in fastest annualized growth since the recession, a global drop in petroleum prices has cooled off its oil boom. The states with the next-fastest growth over the past nine years are Texas (2.9%), Utah (2.6%), Colorado (2.3%), and California (2.2%).
The nation’s laggards are Illinois and Nevada, whose economies expanded at an annualized pace of 0.7% each. The next-slowest growth since the start of the recession has been in Connecticut (0.8%), Maine and Mississippi (each at 0.9%), and Alabama, New Mexico, Rhode Island, and West Virginia (all at 1%).
Regarding recent trends, one-year growth in U.S. personal income through the first quarter of 2017 was close to its lowest level in three years, according to preliminary data. Inflation-adjusted U.S. personal income rose by 1.8% in the first quarter of 2017 from a year earlier—the second-slowest one-year pace since the end of 2013, when personal income contracted.
Personal income growth rose in all but eight states in the first quarter of 2017. In states where personal income fell, some were hit by lingering weakness in farming and mining. The construction and manufacturing industries and state and local governments also cut residents’ earnings.
The Pew report’s authors are Barb Rosewicz, Ruth Mantell, and Joe Fleming.
Personal income sums up residents’ paychecks, Social Security benefits, employers’ contributions to retirement plans and health insurance, income from rent and other property, and benefits from public assistance programs such as Medicare and Medicaid, among other items.