The California economy may be cooling this year but its per capita income growth still tops the nation.
I filled my trusty spreadsheet with new federal data on this broad measure of state-by-state cash flows and found that in 2017’s first nine months, California incomes rose an average 3.3 percent vs. last year’s first three quarters. That was the nation’s largest increase just ahead of Arkansas, Washington, Maryland and North Carolina.
Here are four per capita income trends to ponder …
1. Big number
The 2017 gain pushed California’s per capita income to $58,051, seventh-highest nationally behind the District of Columbia, Connecticut, Massachusetts, New Jersey, New York and Maryland.
Per capita income — total income of all sources (from wages and bonuses to investments to pensions, etc.) divided by the population count — isn’t a perfect measurement of individual prosperity. It can be swayed by extremes, such a huge wealth created at society’s top levels.
Still, it’s a good barometer of statewide economic oomph at the individual level. If nothing else, this upswing explains a lot of the high-end spending we’re witnessing across California from the mall to the auto dealer and in the housing market.
2. Slow and steady
This year’s U.S. leading per capita income gain is only a smidge ahead of 2016’s 3 percent growth when California had the nation’s No. 5 increase.
The reason recent results seem chilled is that in 2015, California’s average per capita income rose 6.6 percent, the nation’s No. 2 increase. In 2014, it rose 5.7 percent, the 11th biggest jump.
This slowdown isn’t a terrible surprise as the extended-but-mild economic expansion goes through its seventh year.
National growth has cooled the past two years, too, according to the per capita income math. Two other key measures of California’s business climate — the even broader yardstick of all business output, gross domestic product, and the economically narrower statewide job count — show similar statewide slowing from swift surges earlier in the Great Recession recovery.
3. Top rebound
Yes, this per capita income boost has not cured every economic challenge in the state nor has it lifted all Californians out of financial distress. Still, the rebound from days when numerous California critics saw a bleak future for the state is a noteworthy turnabout, especially on a national scale.
From 2010’s start, as the ugly downturn was ending, through 2017’s third quarter, California per capita income has risen at a 4.6 percent annualized pace. That’s the fastest upswing among the states and easily bests the nationwide 3.5 percent yearly average pace.
4. Texas twist
Please also note: The much-heralded Texas economy doesn’t look so hot in terms of this benchmark.
Texas per capita income growth since 2010 was a below-average 3.4 percent and was beaten by 20 states. You can blame fallout from the dip in oil prices in an energy-rich state that essentially has kept Texas per capita income flat since the start of 2015. That helps explain how Texas ranked No. 47 in the past 11 quarters vs. California’s top ranking.
It’s a Texas-sized reversal. From 2010-14, per capita income in the Lone Star State rose at a 4.8 annualized pace, fifth-best in the nation … one ranking ahead of, you guessed it, the Golden State.
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