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May 18, 2006 Personal Income Keeping Pace with Inflation in North Dakota Total personal income in North Dakota rose to $18.8 billion in 2004, up 2.8 percent from $18.2 billion in 2003. Prices paid by consumers (as measured by the Consumer Price Index, www.bls.gov/cpi) increased 2.7 percent between 2003 and 2004. After adjusting for inflation, North Dakota’s personal income increased by two-tenths of 1 percent between 2003 and 2004 (0.2 percent). “Although this may sound small, it means we continued to gain purchasing power because our income is growing faster than inflation,” says Richard Rathge, North Dakota State Data Center director. “In addition, over the past 10 years our national ranking in per-capita income has improved from 44th in 1995 to 37th in 2004.” This month’s “Economic Briefs,” a monthly publication from the North Dakota State Data Center at North Dakota State University, focuses on personal income figures as reported by the U.S. Bureau of Economic Analysis (www.bea.gov). Personal income consists of resident earnings, investment and property income (dividends, interest and rent) and transfer receipts, such as retirement, disability, medical and income maintenance payments (payments for which no services are performed). Between 2003 and 2004, net earnings rose 2.5 percent, investment and property income rose 2.6 percent, and transfer receipts rose 4.6 percent. This increase in transfers is significant because approximately $1 out of every $7 of North Dakotans’ income was derived from government transfer payments in 2004. North Dakota earnings largely were generated by government, health care, manufacturing and retail trade industries in 2004. When combined, earnings from these four industries comprised 40.9 percent of total personal income. In terms of growth between 2003 and 2004, earnings from construction, real estate and company management grew the fastest (15 percent, 12.9 percent and 12.8 percent, respectively). North Dakota per-capita personal income (total personal income divided by total resident population) grew 2.3 percent in 2004 to $29,494, up from $28,828 in 2003. In 2004, North Dakota ranked 37th in per-capita income, which is 10.8 percent below the national average of $33,050. The District of Columbia ranked No. 1 at $51,155, followed by Connecticut ($45,318), Massachusetts ($42,176) and New Jersey ($41,626). ### Source: Richard
Rathge, (701) 231-8621, richard.rathge@ndsu.edu
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