Personal Income

Visualization Notes:

The year-over-year percent change in inflation-adjusted personal income typically is considerably higher in Arizona than the national average, as in 2005 and 2006. Year-over-year real personal income growth peaked in early 2006 at 8 percent in Arizona and barely more than 4 percent nationally. After that, the growth rate fell much more in Arizona than nationally. Real personal income was lower than one year earlier from fourth quarter 2008 through first quarter 2010 in Arizona. The year-over-year percent change in real personal income was lower in Arizona than the national average from third quarter 2007 through first quarter 2011. Since then, Arizona’s annual percent increase has been equal to the U.S. average. The rate of growth was a little lower in the last two quarters of 2011 than in the preceding four quarters.

The quarterly percent change in personal income, seasonally adjusted and inflation adjusted, was considerably higher in Arizona than the national average during 2005 and early 2006, as is typical during an economic expansion. However, from mid-2007 through mid-2010, Arizona’s performance in most quarters was below the national average. Since the third quarter of 2010, quarterly gains in real seasonally adjusted personal income in Arizona have been similar to the national average.

Visualization Notes:

The most recent data for personal income by county are for 2009, a recessionary year. These estimates remain subject to revision. The preliminary data indicate that the inflation-adjusted percent change in personal income varied widely across Arizona during 2009, with six counties still experiencing growth, while four counties, including Maricopa, experienced losses of around 4 percent or more. Variations in population growth account for some of the differences across counties in aggregate economic growth.

* The inflation-adjusted percent change in Greenlee County was -18.8 percent.

Visualization Notes:

A healthy economy exists when inflation-adjusted gains in personal income are at least 2-to-3 percent per year. The annual inflation-adjusted percent change in personal income is cyclical, exceeding the target during economic expansions and falling short during recessions. Even during recessions, inflation-adjusted personal income usually rises due to population growth and the countercyclical effect of the transfer payments component, which includes unemployment benefits and income maintenance payments.

During expansions, Arizona’s personal income growth is much higher than the target and the national average due to the state’s much more rapid population growth. In Arizona, the percent change in personal income during economic expansions has dropped over time, a natural result of the considerable increase in the size of the Arizona economy. During recessions, Arizona’s economic performance is inferior to the national average; the change in real personal income was less than the national average in 2008, 2009, and 2010. The sizable inflation-adjusted decrease in 2009, both nationally and Arizona, reflects the depth of the recent recession.