The U.S. Bureau of Economic Analysis (BEA) released estimates of state personal income through the third quarter of 2015 (3Q2015) on December 21. Personal income is a key economic statistic for states: a broad measure of economic activity. It measures wages and salaries and various other types of income, but it excludes capital gains (income resulting from sales of assets, such as stocks and homes).
As of 3Q2015, Robust Year-Over-Year Growth for California Economy. The figures above show quite strong growth for California's economy over the past year. Due largely to a notable upward adjustment in California wages and salaries for the second quarter of 2015 (up from an annualized $1.04 trillion in prior data to $1.06 trillion in the December 21 data), California wages and salaries as of 3Q2015 are now running a strong 7.5% above the same quarter in 2014. This 7.5% growth rate is well above the comparable nationwide 5.1% growth rate. Wages and salaries make up the majority of personal income, so strong growth in that category of personal income drives the overall 6.5% growth rate for all personal income in California versus one year before, compared to 4.6% growth nationwide. Also of note is California's relatively strong growth in proprietor's income, largely that of smaller businesses: up at over twice the national rate of growth over the past year. (Proprietor's income considers income of sole proprietorships and partnerships and, according to BEA, is a "particularly useful analytical indicator of the health of noncorporate businesses.")
California Personal Income Ranks #1 in Year-Over-Year Growth. As of 3Q2015, the year-over-year growth in California personal income ranks first among the 50 states. The top 5 states by this measure are all in the west: California (up 6.5%), Utah (up 6.3%), Nevada (up 5.9%), Washington (up 5.9%), and Oregon (up 5.7%). Among the largest U.S. state economies, Florida (up 5.4%) ranks sixth, New York (up 4.6%) ranks 22nd, and Texas (up 3.9%) ranks 33rd. States with large economic concentrations in oil and coal have had some of the weakest personal income growth over the past year, including North Dakota (ranked 50th, down 2.4%), Wyoming (ranked 48th, up 1.4%), Oklahoma (ranked 46th, up 2.0%), West Virginia (ranked 45th, up 2.3%), and Louisiana (ranked 44th, up 2.6%). For the third quarter of 2015 alone (that is, compared only to the second quarter of 2015), California's seasonally-adjusted quarterly growth rate ranked 14th among the 50 states, while New York ranked 13th, Florida 37th, and Texas 41st (in BEA's Table 1 here, until updated with later revisions).
Follow @LAOEconTax on Twitter for regular California economy and tax updates.