Personal income growth slowed in 2012 in most of the nation’s 381 metropolitan statistical areas (MSAs), according to estimates released today by the U.S. Bureau of Economic Analysis. Personal income growth slowed in 311 MSAs, accelerated in 65 MSAs, and remained unchanged in 5 MSAs. On average, MSA personal income rose 4.2 percent in 2012, after growing 6.0 percent in 2011. Personal income growth ranged from 12.1 percent in Midland, Texas to -1.6 percent in Yuma, Arizona, one of only five MSAs where personal income declined in 2012. Inflation, as measured by the national price index for personal consumption expenditures, slowed to 1.8 percent in 2012 from 2.4 percent in 2011.
Midland, Texas was the fastest growing MSA, in terms of personal income, for the third year in a row. Odessa, Texas, which grew 11.5 percent, was second fastest, as it was in 2011. For both MSAs, the mining industry, which includes oil and gas extraction, contributed more than any other industry to personal income growth. North Dakota’s three MSAs were also among the fastest growing MSAs in the country in 2012: Grand Forks grew 10.5 percent and ranked third, Bismarck ranked fourth (10.1 percent), and Fargo ranked sixth (8.3 percent). Personal income in the nonmetropolitan portion of North Dakota—where the booming mining industry is located—grew at an even faster 26.3 percent pace.
Declines in farm and military earnings, which were relatively small nationally, accounted for the personal income declines in four of the five slowest growing MSAs. In Hanford, Calif., and Yuma, Ariz., farm earnings fell 13.3 percent and 57.5 percent, respectively (while falling only 1.2 percent for the nation). In Elizabethtown, Ky., and Watertown, N.Y., military earnings fell 14.4 percent and 4.6 percent, respectively (but fell only 0.7 percent for the nation).
Personal income also fell in 2012 in Kennewick, Washington. A temporary infusion of American Recovery and Reinvestment Act funds for environmental cleanup in Kennewick peaked in 2011; since then, earnings in the administrative and waste management services industry have fallen 20.5 percent (compared to a 6.1 percent increase nationally).
Large MSAs. Among the 52 MSAs with a population of one million or more, personal income grew 4.4 percent on average in 2012 (down from 6.3 percent in 2011) and ranged from 7.8 percent in Nashville, Tenn., to 3.0 percent in Philadelphia; Providence, R.I.; and Buffalo, N.Y. Professional services, the largest industry in the large MSAs, contributed most to personal income growth in 2012. By way of comparison, the 329 small MSAs with populations below one million grew 3.8 percent on average in 2012, down from 5.6 percent in 2011. Health care was the largest industry among this group of MSAs, and it contributed more than any other industry to personal income growth in 2012.
Per capita personal income. Per capita personal income growth rates ranged from 9.5 percent in Grand Forks, North Dakota to -2.8 percent in Kennewick, Washington.
Nonmetropolitan counties. Personal income grew 3.7 percent in nonmetropolitan counties in 2012, compared to 4.2 percent growth in metropolitan counties. The slower growth of the nonmetropolitan counties reflects the dominance of farming and government services in that portion of the U.S. and the much lower earnings growth of those sectors. Nationally, farm earnings fell 1.2 percent and government earnings rose 0.6 percent in 2012. In contrast, earnings in the private nonfarm sector grew 5.1 percent.