Personal Income

Visualization Notes:

The year-over-year inflation-adjusted percent change in personal income was negative from fourth quarter 2008 through fourth quarter 2009 nationally and in Arizona. Declines were deeper in Arizona. As the economy began to recover, Arizona’s growth rate remained below the national average, finally matching the U.S. average in the most recent quarter. Nationally, the rate of growth in recent quarters has been in the range that preceded the recession. Arizona’s recent rate is far below the figures posted in the mid-2000s.

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. In recent quarters, gains in Arizona have been similar to the national average.

Personal income nationally and in Arizona dropped for five consecutive quarters during the recession, totaling 5.6 percent nationally and 6.7 percent in Arizona. In prior recessions, declines in personal income were modest.

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.