The U.S. Bureau of Economic Analysis (BEA) released the “State Personal Income: Third Quarter” report today revealing that the U.S. average personal income across all states increased by 1.05 percent to $14.18 trillion in the third quarter of 2013, which is slightly lower than the 1.17 percent rate in the second quarter.
As noted by the BEA, “Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of residence, property income, and personal current transfer receipts.” Nationally, personal income growth rates ranged from a high in Mississippi of 1.9 percent to a low of 0.4 percent in New Mexico.
Texas’ 1.34 percent increase to $1.16 trillion during the 3rd quarter ranked the 3rd highest and has now risen during 15 of the last 16 quarters. The remarkable growth in Texas’ personal income continues to support strong job creation, which the unemployment rate recently fell to 6.2 percent, and broad economic prosperity.
On the other hand, California’ personal income growth rate of 1.17 percent to $1.82 trillion ranked 11th in the nation.
Since 2000, there a two of many factors that jump out of this report confirming that the Lone Star State’s economy continues to shine bright compared with the Golden State:
- The compounded annual growth rate in Texas (5.22 percent) has been roughly 1.4 times greater than in California (3.77 percent), and
- The percentage of the U.S. average personal income in Texas (8.2 percent) has increased by 17 percent and in California (12.9 percent) has declined by 3 percent (see figure below).
No matter how you dice it, this report sends another clear signal that the big government policies in California limit the choices of entrepreneurs to prosper compared with the Texas model of low taxes and limited government spending that provides them with the liberty to control their own future, benefitting everyone in the process!