State personal income growth slowed

478690035Average state personal income growth slowed to 2.6 percent in 2013 from 4.2 percent in 2012, according to estimates released Tuesday by the U.S. Bureau of Economic Analysis.

State personal income growth ranged from 1.5 percent in West Virginia to 7.6 percent in North Dakota, with every state growing more slowly in 2013 than in 2012.

Colorado’s personal income grew at the highest quintile. Other states that shared that distinction includes Texas, Oklahoma, Washington, Oregon, Idaho, Utah, North Dakota, Nebraska and Iowa.

The lowest quintile states included New Mexico, Wyoming, South Dakota and others.

Inflation, as measured by the national price index for personal consumption expenditures, slowed to 1.1 percent in 2013 from 1.8 percent in 2012.

The slower personal income growth reflected the effects of several special factors, including the expiration at the beginning of 2013 of the “payroll tax holiday,” a temporary two percentage point reduction in the personal contribution rate for Social Security, and the acceleration of the receipt of income, especially personal dividends and salary bonuses, into 2012 in anticipation of changes in individual income tax rates for 2013. The expiration of the payroll tax holiday increased contributions for government social insurance, a subtraction in the calculation of personal income.

Mining, including oil and gas extraction, contributed to income growth in North Dakota, Oklahoma and Texas in 2013.

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