State GDP and Personal Income

State real GDP growth ranged from Alaska's 8.7 percent annual rate to Mississippi's -0.7 percent. States in the West grew more rapidly, while softness was more evident in the central part of the nation. In general, energy-producing states like Alaska fared best--Texas's number 2 8.2 percent growth rate was nearly half the result of increased mining output—while farm-oriented states were weaker. The Dakotas are the real exemplars of this effect: ex-mining, North Dakota's 5.2 percent growth rate would have been close to South Dakota-s -0.5 percent rate of decline. ranged widely in 2022: Q2.

Looking at industry contributions, major sources of declines were construction, nondurable goods manufacturing, and wholesale trade (all three down in every state). A large pickup in accommodations and food services was arithmetically responsible for Hawaii being one of the few states with a real GDP increase.

State personal income growth ran the gamut from Colorado's 14.2 percent growth rate to Indiana's 1.9 percent. Maine and New Mexico, along with Colorado, saw astonishing rates of growth in transfer payments, while Indiana was held down by a drop in that income category. “Net earnings” (employee compensation plus proprietors' income) was much evener, with Texas's growth rate of 8.5 percent at the top and Indiana's 3.2 percent the lowest.

Last week the numbers on 2021 nominal and real personal consumption and real personal income by state were issued. The high for real spending growth was Utah's 12.5 percent, while West Virginia's 2.0 percent was the low. Numbers of states in the Rocky Mountains had growth exceeding 10 percent, as did Massachusetts, New Jersey, and Florida. West Virginia and Alaska (3.1 percent) were considerable outliers on the low side: no other state was under 5 percent.

The availability of both nominal and real consumer spending figures allows for the computation of state consumption price deflators and their growth. The range of growth went from Vermont's 0.5 percent to West Virginia's 8.1. Other New England states—Maine, New Hampshire, Massachusetts, and Connecticut—also saw deflator growth under 2 percent., while Arizona Nevada, and New Mexico were also on the low side. Other high growth states included Alaska and South Carolina (North Carolina was also high). Differences in state deflators, and their growth, would largely reflect differences in service costs (as one would expect, Alaska and Hawaii have the largest divergence in good price levels), especially housing, but also utilities. Thus, it isn't surprising that there is some regional theme to divergences.