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South Dakota personal income update.

INTRODUCTION

The U.S. Department of Commerce, Bureau of Economic Analysis (BEA) recently released annual estimates of total personal income (TPI) and per capita personal income (PCPI) for 1992. This data serves as one of the key economic indicators for evaluating economic performance for the nation, states and local areas. As a designated member of the BEA User Group of the U. S. Department of Commerce, the Business Research Bureau at the University of South Dakota regularly receives income releases from the BEA. The following article includes the most recently released BEA data for:

* Total Personal Income (TPI)

* Per Capita Personal Income (PCPI)

* Disposable Personal Income (DPI)

Income data for the U.S. and states is available through 1992; county level income data includes estimates through 1991.

PERSONAL INCOME AND ITS COMPONENTS

Personal income as defined by the Bureau of Economic Analysis is income received by persons from all sources. It is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars. It includes:

* Private and government wage and salary disbursements--monetary

compensation for employees and corporate officers,

tips, commissions, bonuses and any payments-in-kind

that constitute income to the recipient

* Other labor income--represents employer contributions to

privately administered pension and welfare funds and other

small items such as directors' fees and compensation of

prison inmates

* Farm and nonfarm proprietors' income--monetary income

and income-in-kind of sole proprietorships and partnerships

and tax-exempt cooperatives

* Rental income of persons--monetary income of persons

from the rental of real property (excluding the income of

persons primarily engaged in the real estate business)

* Personal dividend income--measures the dividends received

by persons from all sources

* Personal interest income--interest income of persons from

all sources

* Transfer payments--payments to persons who do not render

current services. Included are payments by government

and business to individuals and to nonprofit institutions

serving individuals.

* Less personal contributions for social insurance--consists

of payments by employees, the self-employed, and other

individuals who participate in the following programs: federal

old-age, survivors, and disability insurance; hospital

insurance; supplementary medical insurance; state unemployment

insurance; railroad retirement; government employee

retirement; veterans life insurance; and temporary

disability insurance.

TOTAL AND PER CAPITA PERSONAL INCOME

From 1983 to 1992 South Dakota's personal income growth averaged 7.5 percent per year, somewhat higher than the 4.0 percent increase for 1991-1992. South Dakota's annual average rate of growth for 1983-1992 of 7.5 percent was slightly less than the U.S. annual average increase of 7.7 percent for this same period. (Table I)

[TABULAR DATA I OMITTED]

Per capita personal income is the annual total personal income of residents divided by resident population as of July 1. The 1981-89 population estimates have been adjusted to reflect both the 1980 and 1990 Censuses of Population; the 1990 midyear estimates reflect the April 1, 1990 census count and 3 months of estimated population change. Table II compares the years 1983 to 1992 for the U.S. and Plains Region states. South Dakota's 2.9 percent increase for 1991-92 represented one of the slower growing states in the nation. The nation's per capita income increased 3.9 percent for this period. Large declines in farm income contributed to South Dakota's slow growth in 1992. (Table II)

[TABULAR DATA II OMITTED]

In 1973, South Dakota's per capita personal income (PCPI) was nearly equal to the national average. During the 1970's, South Dakota's PCPI fluctuated between 79 percent to a high of 97 percent in 1973. In the 1980's the fluctuation was not as great ranging from 77 percent to 82 percent of the national average. In the early 1990's, South Dakota's PCPI reached 84 percent of the national average.

DISPOSABLE PERSONAL INCOME

Disposable personal income includes total personal income less personal tax and nontax payments, such as tuition, donations, and fees paid to government-operated schools and hospitals. Personal tax payments include income, estate and gift, personal property, and some license taxes. Disposable personal income represents the income available to persons for spending or saving. Comparisons of the states in the Plains Region for the period 1983-1992 show South Dakota averaging a 7.5 percent increase per year, second to Minnesota's 8.1 percent. (Table III)

[TABULAR DATA III OMITTED]

MAJOR SOURCES OF PERSONAL INCOME IN SOUTH DAKOTA

Table IV provides the most recent BEA estimates of personal income by type, and earnings by industrial source. Total personal income is presented by place of residence, i.e., income is credited to the area of the recipient's residence, while earnings are by place of work, i.e., income is credited to the area in which the earning activity takes place. Although farm income dropped 17.3 percent for the 1992-92 period, nonfarm personal income was strong with a 6.4 percent gain. The construction and mining sectors both registered increases of more than 15 percent followed by a healthy increase of 10.5 percent for manufacturing.

[TABULAR DATA IV OMITTED]

COUNTY PERSONAL INCOME AND PER CAPITA INCOME

County comparisons of total personal income and per capita income for 1989, 1990, and 1991 are shown in Tables V and VI. Minnehaha county ranked first in total personal income in 1991 followed by Pennington and Brown counties.

[TABULAR DATA V and VI OMITTED]

Sully county ranked number one with per capita income of $32,620 in 1991, followed by Jones with $23,510 and Perkins county with $23,155. On a regional basis, Region V experienced a 5.6 percent increase for 1990-91. (Table VI)

U.S. ECONOMIC OUTLOOK

DRI/Mcgraw-Hill forecasters report in their June 1993 newsletter that growth occurring since the 1990-91 recession was stimulated by lower interest rates and a pick-up in consumer confidence. Concern about the deficit and inflation have raised bond yields, which could cause a slowdown in the economy. Depending on the effectiveness of the recently passed deficit-reduction package, if bond yields stabilize, the economy could recover later this year.

Comparisons of selected economic indicators through 1995 are included in the following table.

About the author: Nancy Nelson is an Administrative Assistant at the Business Research Bureau, University of South Dakota in Vermillion.
COPYRIGHT 1993 The Business Research Bureau
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes statistical appendix
Author:Nelson, Nancy
Publication:South Dakota Business Review
Date:Jun 1, 1993
Words:1017
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