Personal Income, Inflation-Adjusted Percent Change
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 typically 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 usually is inferior to the national average.
Nationally, real personal income growth was 4.1 percent in 2011 and 3.3 percent in 2012, meeting the target. The gains were lower in Arizona at 3.3 percent in 2011 and 2.6 percent in 2012. In 2013, the gains nationally and in Arizona were below the target at around 0.5 percent. Greenlee was the only Arizona county that had a growth rate of at least 2 percent in each year. Among the other counties, five reached the target in 2011, but only Maricopa and Yavapai had growth that strong in 2012, and only Graham reached the target in 2013.