Arkansas personal income grows 3.2% in 2017, ranks 16th nationally

Arkansas ended 2017 with personal income growth of 3.2%, ranking the state 16th among all 50 states and the District of Columbia. Farming and healthcare services were the largest contributors to the state’s overall earnings gain, according to estimates released Thursday (March 22) by the U.S. Bureau of Economic Analysis (BEA).

Arkansas’ personal income gains were slightly above the national average in 2017 as U.S. earnings grew 3.1% to $16.4 trillion, up from $15.9 trillion in the same period of 2016. With a total estimated population of 325.7 million people, each American contributed an average income of $50,392 into the nation’s economy.

U.S. economists, including members of the Federal Reserve’s Open Market Committee, watch personal income growth as a key indicator of the nation’s economic health. Not to be confused with U.S. payrolls, personal income consists of an individual’s total earnings from wages, investments and other ventures such as rent income. It is the sum of all the incomes received by all the individuals or households during a given period, such as a fiscal year or quarter.

In Arkansas, state personal income increased 1.1% in the fourth quarter of 2017, after remaining flat in the third quarter and only 0.4% growth in the second quarter. Arkansas began the first quarter of 2017 ranked among the top 10 states in personal income growth at 2%. From 2015 to 2016, personal income in Arkansas also grew at a 3.2% rate – which then ranked 27th among the 50 states.

In actual dollars, personal income growth for Arkansas earnings grew 3% to $122.5 billion, up from $118.9 billion in 2016. That amounts to $40,791 in earnings for each of the three million residents in the Natural State, ranking Arkansas 43rd among all 50 states and the District of Columbia. Last year, Arkansas topped 3 million in population for the first time in the state’s history, according to Census Bureau estimates.

The Southeast region, which includes Arkansas and 11 other states, led U.S. regional personal income growth at $3.7 trillion, up from $3.4 trillion a year ago. The 12-state region’s overall growth held at 3.4% for the year, meaning that each of the 84 million people in the nation’s fastest growth area earned an average $44,355 per resident.

By industry, Arkansas’ farming and healthcare and social assistance industries were easily the biggest earnings contributors at 0.47% and 0.37%, respectively. By dollars, total farming earnings in Arkansas grew by $552 million, while healthcare income rose by $444 million.

Other key year-over-year gainers were construction, state and local government and durable goods manufacturing (0.16%), construction and nondurable manufacturing (0.14%), small business management (0.13%), and professional and business services (0.12%). Personal income for military, mining and information services were the only decliners.

NATIONAL NUMBERS
Nationally, the western states of Washington (4.8%), Idaho (4.7%), Nevada (4.4%), Utah (4.4%) and Arizona (4.3%) reported the strongest gains for the 12-month period with robust growth in retail, durable goods manufacturing, construction, professional and business services, and health care and social assistance.

North Dakota was the only state in the union that saw negative personal income growth at -0.3%. Other states among the bottom five included Iowa, Kansas, Alaska, South Dakota and Nebraska at 0.3%, 0.4%, 1% and 1.4%, respectively.

Overall, earnings increased in 22 of the 24 industries included in BEA estimates. Earnings growth in three industries – health care and social assistance; professional, scientific, and technical services; and construction – were the leading contributors to overall growth in personal income.

For the nation, retail earnings topped out at 15.3% in Washington compared with 2.9% for the nation. Durable goods manufacturing increased 9.7% Idaho compared with 2% for the rest of the U.S. Construction earnings increased 13.2% in Nevada compared with 5.2% for the nation. Professional business services earnings increased 7.6% in Utah compared with 3.7% for the nation. Health care earnings was the leading contributor in Arizona at 6.4% compared with 4.1% for the U.S.

Farm earnings decreased 6.6% for the nation in 2017, decimating growth in agriculture-focused states such as Kansas, Nebraska and South Dakota. Mining earnings, which include the nation’s oil and gas sector, decreased 2.7% in 2017 and was the leading contributor to lower earnings in Alaska. Mining earnings have fallen 35% in the U.S. since 2014.