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November 28, 2020

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Perspectives

Pittsburgh Perspectives  

Archive List Link to PEQ
Monday, May 18, 2020  02:00 PM  (35)

Strong Regional Gains in Real Personal Income

Today the U.S. Bureau of Economic Analysis (BEA) released 2018 estimates of real personal income and real per capita personal income for states and metropolitan statistical areas (MSAs) in the United States. Personal income is income that people receive from wages and salaries, Social Security and other government benefits, dividends and interest, business ownership, and other sources. Real personal income reflects adjustments for both national inflation the changes in the average prices of goods and services for the average consumer across regions. 

Between 2017 and 2018, real per capita personal income in the Pittsburgh region increased from $55,443 to $58,117, a gain of 4.8%. The average per capita personal income for the United States in 2018 was $50,346. Among the 40 largest MSAs in the nation, Pittsburgh’s 4.8% increase in real per capita personal income exceeded the rate of change in all MSAs except for the San Jose, California MSA, which increased by 6.4% to $152,932.

Last fall, BEA released estimates through 2018 of total and per capita personal income for states and MSAs. These estimates were not adjusted for either national inflation levels or changes in regional price levels.  Among the 40 largest MSAs, the Pittsburgh region's increase in per capita personal income was ranked 6th (see: Perspectives November 2019).  Pittsburgh's stronger relative ranking in real per capital personal income reflects the impact of changes in Regional Price Parity (RPP) indices calculated by the BEA for states and MSAs. The RPP for the Pittsburgh region is estimated to be 93.1, which was a slight decline from 93.4 in 2017. This estimated RPP means regional prices levels in Pittsburgh are 6.9% below national averages. By comparison, San Jose's RPP increased from an estimated 128.5 in 2017 to 130.0 in 2018, meaning that regional prices there are increasing and for 2018 regional prices were 30% above national averages. 

BEA calculates RPPs using price quotes for a wide array of items from the CPI, which are aggregated into broader expenditure categories (such as food, transportation or education)1. Data on housing rents are obtained separately from the Census Bureau's American Community Survey (ACS). The expenditure weights for each category are constructed using CPI expenditure weights, BEA's personal consumption expenditures, and ACS rents expenditures. Areas with high/low RPPs typically correspond to areas with high/low price levels for rents. BEA uses the Census Bureau’s annual midyear (July 1) population estimates to construct per capita measures of personal income for all areas. 

Personal income reported here are annual averages through 2018. As such, they do not reflect the recent impact of the COVID-19 pandemic and the emerging economic slowdown of 2020. 

 

Real Per Capital Personal Income, 2017-2018 - 40 Largest Metropolitan Statistical Areas

Ranked by % Gain, 2017-2018

  Real Per Capita Personal Income    
MSA 2017 2018 Change 2017-18
San Jose $72,131 $76,500 +$4,369 +6.1%
Pittsburgh $55,443 $58,117 +$2,674 +4.8%
Denver $54,743 $57,109 +$2,366 +4.3%
St. Louis $55,097 $57,243 +$2,146 +3.9%
San Diego $47,354 $49,143 +$1,789 +3.8%
Seattle $59,376 $61,585 +$2,209 +3.7%
Milwaukee $54,113 $56,024 +$1,911 +3.5%
Austin $52,831 $54,680 +$1,849 +3.5%
San Francisco $68,042 $70,399 +$2,357 +3.5%
Chicago $53,385 $55,154 +$1,769 +3.3%
Philadelphia $55,197 $57,001 +$1,804 +3.3%
Baltimore $52,891 $54,502 +$1,611 +3.0%
Providence $49,461 $50,949 +$1,488 +3.0%
Los Angeles $49,389 $50,866 +$1,477 +3.0%
Virginia Beach $47,306 $48,629 +$1,323 +2.8%
Cincinnati $54,572 $56,095 +$1,523 +2.8%
US Average $48,980 $50,346 +$1,366 +2.8%
Miami $47,256 $48,550 +$1,294 +2.7%
Cleveland $54,155 $55,623 +$1,468 +2.7%
Houston $50,004 $51,336 +$1,332 +2.7%
San Antonio $45,467 $46,645 +$1,178 +2.6%
New York $56,157 $57,604 +$1,447 +2.6%
Portland $49,916 $51,187 +$1,271 +2.5%
Detroit $50,553 $51,829 +$1,276 +2.5%
Minneapolis $55,719 $57,123 +$1,404 +2.5%
Boston $62,721 $64,224 +$1,503 +2.4%
Washington $56,100 $57,359 +$1,259 +2.2%
Atlanta $49,207 $50,265 +$1,058 +2.2%
Dallas $50,681 $51,755 +$1,074 +2.1%
Nashville $55,777 $56,933 +$1,156 +2.1%
Kansas City $52,917 $53,984 +$1,067 +2.0%
Las Vegas $44,483 $45,342 +$859 +1.9%
Orlando $40,303 $41,059 +$756 +1.9%
Riverside $34,614 $35,256 +$642 +1.9%
Charlotte $50,688 $51,625 +$937 +1.8%
Phoenix $43,050 $43,842 +$792 +1.8%
Columbus $50,964 $51,871 +$907 +1.8%
Indianapolis $54,166 $55,127 +$961 +1.8%
Tampa $43,809 $44,484 +$675 +1.5%
Sacramento $50,003 $50,616 +$613 +1.2%

Compiled from U.S. Bureau of Economic Analysis (BEA) data. Table Personal Income, Population, Per Capita Personal Income (CAINC1).




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