AP: Personal income growth falls, but some areas actually see increases.
On August 6, the Bureau of Economic Analysis (BEA) released its latest personal income figures for the 366 U.S. metropolitan statistical areas. On average, MSA personal income grew at a rate of 3.3 percent in 2008, down from 6 percent in 2007. Personal income growth increased in 42 MSAs, stayed the same in 2 MSAs, and slowed in 308 MSAs.
MSA data is compiled on an annual basis, which is why 2008 figures are just being released today. However, based on the first 7 months of 2009 data for the nation as a whole, BEA researchers expect an even worse year for the MSAs. Personal income has declined in every month in 2009 except for a slight increase in May of 1 percent.
Fastest growing areas
Personal income growth rates ranged from a high of 12 percent in Hinesville, Georgia to a low of -3.7 percent in Gulfport, Mississippi. Hinesville's growth is due in large part to military spending. Other areas with high income growth, such as Jacksonville, North Carolina and Manhattan, Kansas, also benefitted from spending by the military. Income from the oil industry helped the high-growth MSAs in Texas, Oklahoma, Alaska, and Colorado. St. Louis also saw an increase in personal income growth, but much of the growth was due to severance package compensation. This type of income is short-term and not likely to sustain economic growth in the area.
Slowest growing areas
Manufacturing and construction industries accounted for much of the decline in income growth in all five of the slowest-growing MSAs: San Jose, Phoenix, Detroit, Tampa, and Jacksonville, Florida.
Areas not growing at all
Personal income actually fell in 5 MSAs. Manufacturing losses accounted for the income decline in Dalton, Georgia, Monroe, Michigan, Elkhart, Indiana, and Kokomo, Indiana. A tapering off of government support after Hurricane Katrina accounted for the loss of income in Gulfport, Mississippi. One positive trend in the gulf region is that actual earned income rose in 2008. This increase could bode well for the region once the economy starts to recover.
The economy's silver lining
While the increase in personal income growth has slowed and unemployment remains high, a few bright spots exist. Initial claims for unemployment insurance dropped last week, indicating that the labor market might be beginning to stabilize. The latest unemployment rate, which will released by the Labor Department on August 7, is expected to be higher than in previous months. However, the lower unemployment insurance claims could be a sign that the broader economy is stabilizing. For more information about the economic recovery, click here.
For tips on job hunting during periods of high unemployment, click here.
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