Survey of Current Business
March 2019
Volume 99, Number 3
Regional Quarterly Report: GDP, personal income, and more...

Estimates for the Third Quarter of 2018

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The regional statistics released by the Bureau of Economic Analysis (BEA) for the third quarter of 2018 provide insight into current economic trends for the 50 states and the District of Columbia. This Regional Quarterly Report first discusses the range of growth rates in real state gross domestic product (GDP), with a look at the contributions to growth of 21 industries. It then presents state personal income statistics, highlighting the contributions to growth of its seven major components.

Real GDP growth slowed in the third quarter of 2018 in 39 states and in the District of Columbia (table A) and ranged from 5.8 percent in the state of Washington to zero in West Virginia.1 U.S. real GDP grew 3.4 percent in the third quarter of 2018, down from 4.2 percent in the second quarter. Current-dollar U.S. GDP growth also slowed to 4.9 percent from 7.6 percent. Even so, the real U.S. GDP growth rates of the second and third quarters were the highest in the 4 years since the third quarter of 2014.

  • Real GDP growth slowed in the four largest states—California, Texas, Florida, and New York—which accounted for 36.3 percent of U.S. GDP in the third quarter.
  • In California, Florida, and New York, the information, real estate, and professional services industries more than accounted for the slowdown.
    • In California, where real GDP growth slowed to 3.5 percent from 3.7 percent, the information, real estate, and professional services industries contributed 1.75 percentage points to real GDP growth in the third quarter (table B); in the second quarter, they contributed 3.02 percentage points.
    • In Florida, where real GDP growth slowed to 3.8 percent from 4.5 percent, the information, real estate, and professional services industries contributed 1.05 percentage points to real GDP growth in the third quarter; in the second quarter, they contributed 2.16 percentage points.
    • In New York, where real GDP growth slowed to 2.8 percent from 3.1 percent, the information, real estate, and professional services industries contributed 0.67 percentage point to real GDP growth in the third quarter; in the second quarter, they contributed 2.19 percentage points.
  • In Texas, real GDP growth slowed to 3.7 percent from 6.0 percent. Mining and durable goods manufacturing contributed 0.41 percentage point to real GDP growth in the third quarter; in the second quarter, they contributed 2.04 percentage points. The contributions of the information, real estate, and professional services industries also declined from the second to the third quarter.
  • Real GDP growth accelerated in eight states in the third quarter; the largest of these states was Washington. Real GDP growth accelerated to 5.8 percent in Washington from 3.7 percent. Information and retail trade contributions to real GDP growth increased to 2.34 percentage points in the third quarter from 1.40 percentage points in the second quarter.

Personal income growth accelerated in the third quarter of 2018 in 33 states and in the District of Columbia (table C).2 U.S. personal income grew 4.0 percent in the third quarter of 2018, up from 3.4 percent in the second quarter. Personal income growth ranged from 6.2 percent in Nevada and in Washington to 2.1 percent in Missouri.

  • Compensation of employees, the largest component of personal income, grew in every state in the third quarter of 2018 after falling in 12 states and in the District of Columbia in the second quarter.3 Compensation growth accelerated in 24 states. It grew the fastest in the state of Washington (7.5 percent), and within Washington, compensation grew the fastest in the information industry (23.7 percent).
  • Proprietors’ income, which represents the income earned from current production by unincorporated businesses that is received by persons, rose 3.1 percent on average in the third quarter after rising 4.8 percent in the second quarter. In the third quarter, New Hampshire’s proprietors’ income grew the fastest (7.1 percent), while Arkansas’ fell the most (8.5 percent). Farm proprietors’ income fell in every state—by as much as $1.2 billion in North Carolina—while nonfarm proprietors’ income grew in every state (table D).4
  • Property income growth (dividends, interest, and rent) increased 4.0 percent on average in the third quarter after increasing 3.9 percent in the second quarter. The biggest increase, 5.2 percent, was in the state of Washington, while the smallest increase was in Oklahoma (2.6 percent). Personal dividend income grew 5.0 percent, personal interest income grew 1.9 percent, and the rental income of persons increased 7.0 percent.
  • Personal current transfer receipts, which consist primarily of Social Security, Medicare, and Medicaid benefits, grew 4.0 percent in the third quarter, a deceleration from the 4.4 percent growth in the second quarter. The growth was fastest in Colorado, where transfer receipts grew 10.9 percent. Transfer receipts fell 1.6 percent in New York, the only state with a decline. A 28.3 percent increase in Medicaid transfer receipts accounted for the bulk of the increase in Colorado, while an 11.3 percent decline in Medicaid and a 26.0 percent decline in state unemployment insurance compensation accounted for the decrease in New York.
  • Contributions for government social insurance, a subtraction in the derivation of personal income, grew 3.8 percent in the third quarter after rising 2.7 percent in the second quarter. The largest increase was in the state of Washington (6.9 percent), the state with the largest increase in compensation. The smallest increase was in West Virginia (0.7 percent), which had the smallest increase in compensation.
  • The residence adjustment for New York fell $700 million in the third quarter after falling $1,423 million in the second quarter (table D). For New Jersey, the residence adjustment increased $489 million in the third quarter after rising $965 million in the second quarter.

 


  1. Quarterly estimates and percent changes are expressed at seasonally adjusted annual rates, which reflect the rate of activity for the quarter as if it were maintained for a year. The third-quarter 2018 state GDP estimates are aligned with the national estimates in the February 21, 2019, GDP by industry release.
  2. State personal income, which is measured in current dollars, is the sum of compensation; proprietors’ income; dividends, interest, and rent; and personal current transfer receipts, less contributions for government social insurance, plus an adjustment for residence. Quarterly estimates in dollars are expressed at seasonally adjusted annual rates; quarter-to-quarter percent changes are annualized. The third-quarter 2018 state personal income estimates are aligned with the national estimates that were released on November 29, 2018.
  3. Compensation accounted for 53–70 percent of state personal income in the third quarter of 2018.
  4. There are no farm proprietors in the District of Columbia.