Arkansas’ per capita personal income rose 3.7% in 2011 — below the national state average growth rate of 4.6% — to settle at $34,104.
The latest statistics were released Wednesday (March 28) by the U.S. Department of Commerce Bureau of Economic Analysis.
Arkansas was on the low end of growth among states ranking 42nd in per capita income expansion and settled at 44th among the 50 states in personal income. Idaho, Kentucky, Mississippi, South Carolina, Utah, and West Virginia ranked below Arkansas in per capita income in 2011.
For the entire U.S., per capita income was up 4.3% to $41,663 putting Arkansas at 82% of the national average.
Overall, the state’s total personal income was $99.93 billion, up from $95.84 billion in 2010 and $92.87 billion in 2009 when the recession pushed Arkansas earnings below the previous peak of $94.46 billion in 2008, revised BEA statistics show.
The BEA defines personal income as all income received by all persons from all sources, including net earnings by place of residence, property income, and personal current transfer receipts.
Dr. Michael Pakko, chief economist with UALR’s Institute for Economic Advancement, said that farm income reduction was a big contributor to Arkansas’ below average growth rate.
“Farm income was particularly weak in 2011,” Pakko said on his blog, ArkansasEconomist.com. “Although it accounts for less than 2% of total personal income in the state, farm income declined 17.3% from the fourth quarter of 2010 through the fourth quarter of 2011. Arkansas nonfarm income was up 4.0% over the same period.”
Pakko also warned that the figures released today are not adjusted for inflation.
“One consideration to bear in mind when evaluating personal income statistics is that they are not adjusted for inflation,” he said. “Typically, the national price index for personal consumption expenditures is used to adjust the nominal figures for inflation. By this measure, prices rose 2.5% in 2011, so the 3.7% increase in nominal per capita personal income correponds to a real (inflation-adjusted) increase of only 1.2%.”
Earnings, which grew an average 4.4% nationally in 2011, are a component of personal income and reflect wages. The BEA said earnings in the U.S. recovered from their pre-recession levels and reached new peaks in 45 states. However, 5 states — Arizona, Florida, Michigan, Nevada, and Oklahoma — are still below peaks reached in 2007 or 2008.
Earnings also increased in every private industry in 2011 and earnings growth accelerated in all private industries, except administrative services and accommodations.
In the public sector, earnings for state and local government employees declined 0.3%, while earnings growth slowed for civilian federal government workers and military personnel to 0.6% and 1.3% respectively.