Per capita income up 4.3% in Arkansas, farm income up 65%

by Michael Tilley (mtilley@talkbusiness.net) 569 views 

Arkansas’ per capita personal income grew 4.35% compared to 2017, but the state’s per capita rank among the 50 states fell from 43 to 45. Overall personal income in 2018 was $128.286 billion, up 4.03% from $123.313 billion in 2017, according to a U.S. Bureau of Economic Analysis report posted Tuesday (March 26).

Per capita income of $42,566 in Arkansas during 2018 was below the $46,830 that was the average of all Southeast states, and well below the $53,712 U.S. average. Arkansas’ per capita income was $40,791 in 2017. The state’s per capita personal income is up 33.6% compared with the beginning of the decade when the income was $31,866 in 2010.

Greg Kaza, director of the Arkansas Policy Foundation, noted that the state’s 2018 rank marks progress from 2009 – the last year of the Great Recession – when the state ranked 48 in per capita personal income.

Following are the top five states with respect to 2018 per capita income.
Connecticut: $74,561
Massachusetts: $70,073
New York: $68,667
New Jersey: $67,609
Maryland: $62,914

Mississippi ranked 50 among the states with 2018 per capita income of $37,994.

Nationwide, state personal income was up 4.5% in 2018, which followed a 4.4% gain in 2017 compared with 2016. Personal income increased in all states and the District of Columbia, noted the BEA report. The change in personal income among the states ranged from 6.8% in Washington to 2.9% in Hawaii. Earnings increased in all 24 industries for which BEA prepares estimates, and growth in professional, scientific, and technical services; health care and social assistance; and construction were the leading contributors to overall growth in personal income.

Following are the top five Arkansas industry sectors in 2018 by earnings according to the BEA report.
• Farm
2018: $911 million
2017: $552 million
up 65%

• Health care
2018: $355 million
2017: $444 million
down 20%

• Professional services
2018: $257 million
2017: $145 million
up 77.2%

• Nondurable goods manufacturing
2018: $250 million
2017: $152 million
up 64.5%

• Administrative services
2018: $209 million
2017: $155 million
up 34.8%

Durable goods manufacturing ended 2018 with $169 million in earnings, down 10.6% compared to 2017.

Michael Pakko, an economist with the Arkansas Economic Development Institute at the University of Little Rock, said the state economy finished with an impressive fourth quarter. The fourth quarter 2018 data was included in the annual BEA report.

“Arkansas total personal income surged at an annual rate of 7.5% in the fourth quarter of 2018, outpacing the U.S. growth rate of 5.2% and ranking as the 5th fastest-growing state in the nation,” Pakko noted on his Arkansas Economist blog. “The sharp increase was largely attributable to spike in farm income, which increased at an annual rate of 385%. The increase in farm income was not unique to Arkansas: The only states to outpace Arkansas’ growth rate in the fourth quarter were the agricultural states of  South Dakota, Iowa, Nebraska and North Dakota. Even without the volatile farm income component, however, Arkansas personal income increased at a rate of 4.7% – essentially the same rate as the U.S. total.”

The 2018 full year and fourth quarter BEA reports are subject to revision.

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