Income barely outruns prices
Despite the increase, Hawaii ranks 33rd in year-over-year growth
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Despite a boost in the personal incomes of residents in the third quarter, Hawaii is still below the national average on year-over-year growth.
During the third quarter, the state's personal income growth ranked No.10 in the nation at 1.6 percent, up from No. 12 in the previous quarter at 1.5 percent, according to data released yesterday by the U.S. Bureau of Economic Analysis.
However, the state's year-over-year income growth was 6 percent -- 33rd in the nation, and barely above the estimated local inflation rate of 5 percent.
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The state's personal income growth ranked among the top in the nation in the third quarter at 1.6 percent, though year-over-year growth fell below the national average.
Hawaii's third-quarter growth rate placed it at No. 10 in the country, up from No. 12 in the previous quarter, according to the latest report released yesterday by the U.S. Department of Commerce's Bureau of Economic Analysis. The nation's third-quarter average was 1.4 percent.
However, the state's year-over-year nominal growth was 6 percent -- placing Hawaii at No. 33 in the nation -- below the national rate of 6.5 percent. It also was lower than the second-quarter rate of 6.2 percent and first-quarter growth of 7.1 percent.
Adjusted for an estimated local inflation rate of 5 percent, personal income is expected to grow a modest 1 percent year-on-year in the third quarter, said Byron Gangnes, an economist with the University of Hawaii Economic Research Organization.
"It does confirm the general cooling trend we've been experiencing for the last couple of years," Gangnes said. "No real big surprises, just that path of gradual deceleration."
The state's year-to-date real personal income growth is about 1.4 percent and is expected to be 1.6 percent for 2007, he added.
Meanwhile, Washington State's personal income grew about 3.6 percent in the quarter while Minnesota had the lowest growth at 0.8 percent.
The largest contributors to Hawaii's personal income growth were state and local government, military and health care, according to report.
"For the U.S. and for most states there was very little change in military earnings, but in Hawaii it contributed two-tenths of a percentage point to personal income growth and that's very large," said David Lenze, an economist with the U.S. Bureau of Economic Analysis.
The leading areas of growth in the quarter for the U.S. were professional services, health care and state and local government.
The largest growth in real income, however, is continuing to take place in Hawaii's construction sector, where year-to-date growth is 7.5 percent, adjusted for inflation, Gangnes said.
Finance, insurance and real estate year-to-date inflation-adjusted growth was down 5 percent, he added.
Personal income growth
Top states in personal income growth between the second and third quarters of 2007:
Source: U.S. Bureau of Economic Analysis