United States Comparative Trends Analysis:
Per Capita Personal Income Growth and Change, 1958-2015
2015 PCI = $48,112
Per Capita Income (PCI) is one of the most widely used indicators for gauging the economic performance and changing fortunes of local economies. It is used as a yardstick to assess the economic well being of a region's residents and the quality of consumer markets. It serves as a barometer for calibrating the economic performance of a region over time and to judge differences in relative economic prosperity between regions. Shifting trends in local per capita income growth have important social and political ramifications and significant implications in formulating local economic development strategies and initiatives.
BEA Data Definition:
Personal income is the income that is received by persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors' income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and personal current tranfer receipts, less contributions for government social insurance. This measure of income is calculated as the personal income of the residents of a given area divided by the resident population of the area. In computing per capita personal income, BEA uses the Census Bureau's annual midyear population estimates.
Personal income is measured as a flow throughout the year, while the measurement of population is at one point in mid-year. Therefore, per capita income is distorted if a significant change in population occurs during the year.
For smaller states in particular, per capita income in any given year may be exceptionally high or low for the short run because of unusual local conditions, such as a bumper crop, a catastrophe, or a major construction project as the building of a dam or nuclear power plant.
Farm incomes are notorious for being especially volatile year-to-year, owing to changing weather, commodity market conditions, and alterations in government programs. Therefore, the per capita income of farm-dependent states may exhibit sharp fluctuations over time.
The presence of large institutional populations--such as residents attending a local college or the residents of a local prison or state mental institution--can significantly lower the per capita income estimates of an area. Such results may not reflect the relative economic well being of the non-institutional population and may mislead if care is not given to their interpretation.
United States Per Capita Personal Income, 1958-2015
Current vs. Constant Dollars
Figure 1 depicts the United States' annual per capita personal income over 1958-2015 in current and constant (2009) dollars. Constant dollar measurements remove the effects of inflation. They allow for comparison of changes in the real purchasing power of the United States over time.
When measured in current dollars, the United States' per capita personal income increased 2,124.3%, from $2,163 in 1958 to $48,112 in 2015. When measured in constant 2009 dollars to adjust for inflation, it advanced 245.1%, from $12,726 in 1958 to $43,925 in 2015.
Real Per Capita Personal Income Indices (1958=100): 1958-2015
Figure 2 portrays the United States' real per capita personal income growth in a broader context by offering direct comparisons across time with . The growth indices shown here express each region's real per capita personal income in 1958 as a base figure of 100, and the real per capita personal incomes in later years as a percentage of the 1958 base figure.
The United States' overall real per capita personal income growth was 245.1% over 1958-2015 .
United States Real Per Capita Personal Income:
Annual Percent Change, 1959-2015
Figure 3 shows the short-run pattern of the United States' real per capita personal income growth by tracking the year-to-year percent change over 1959-2015. The average annual percent change for the entire 57-year period is also illustrated on this chart to provide a benchmark for gauging periods of relative high--and relative low--growth against the backdrop of the long-term average.
On average, the United States' real per capita personal income grew at an annual rate of 2.21% over 1959-2015. The United States posted its highest growth in 1984 (5.56%) and recorded its lowest growth in 2009 (-4.09%). In 2015, the United States' real per capita personal income grew by 3.30%
United States Real Per Capita Personal Income:
Annual Percent Change and Decade Averages Over 1959-2015
Over the past five decades some countries have experienced extreme swings in growth, and often such swings have tended to coincide with the decades themselves. Figure 4 again shows the annual percent change in the United States' real per capita personal income since 1959, but this time they are displayed with average growth rates for the decade of the 1960s, 1970s, 1980s, 1990s, 2000s, and 2010-2015.
During the 1960s, the United States' annual real per capita personal income growth rate averaged 3.48%. It averaged 2.34% in the 1970s, 2.21% throughout the 1980s, 2.05% in the 1990s, 1.12% throughout the 2000s, and 1.85% thus far this decade (2010 to 2015).
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