The US Bureau of Economic Analysis released its Q1 Personal Income report on June 21, 2018. The report showed signs that the South Dakota economy may be turning around. Personal Income, which includes wage, business, and investment income, grew by 4.9% between Q4 2017 and Q1 2018. South Dakota ranked 20th in the nation as a result.
Net earnings (i.e. the portion of personal income derived from wage and salary earnings) also rose by 5.7% from Q4 2017 to Q1 2018 versus only 4.7% for the nation overall. Growth in net earnings is typically a sign of a healthy labor market where either more people are working, wages are rising, or some combination of both.
The report also hints that the Ag sector may be turning around after significant declines in 2017. Personal income in the Farm sector grew by 0.28% percentage points, or $29 million during Q1 2018. Farm sector personal income growth in the South Dakota was 4th in the nation, trailing behind only Vermont, Wyoming, and North Dakota, where farm incomes grew by 0.96%, 0.63%, and 0.42%respectively.
Other signs of an improving economy were seen in strong personal income growth in the Construction, Durable goods manufacturing, and Health care industries whose rates of personal income growth were 0.44%, 0.40% and 0.57% respectively.
The performance of the construction and durable goods manufacturing industries are often considered leading indicators of economic performance, but their performance can also be volatile and highly sensitive to macroeconomic conditions and market confidence. Trade frictions between the United States and its trading partners could slow these sectors in the near to medium turn. The Ag sector could face similar headwinds in the future as well. In light of these considerations, it may be necessary to temper expectations of such strong performance in Q2 2018.
Seniors living South Dakota’s micropolitan areas experienced an increase in median household income from 2012-2016, according to data from the U.S. Census Bureau. From 2007-2011, older adults (adults aged 65 and older) had median household incomes of $33,702, which increased to $38,263 from 2012-2016.* Meanwhile, older adults in the Rushmore State’s metropolitan areas earned $38,880 from 2007-2011 and $39,504 from 2012-2016.
Overall, older adults in South Dakota earned slightly less than their counterparts across the nation in 2016. South Dakotan adults over the age of 65 had median household incomes of $39,528 while at the national level, adults aged 65 and older earned slightly more at $42,113. South Dakota’s median household income for older adults ranked the state No. 33 in the nation.
Within South Dakota, older adults in Hughes County had the highest median household incomes in 2016 at $55,667. Pennington County ranked 11th in the state at $41,751 while Minnehaha placed 17th at $38,226. The top three and bottom three counties are depicted in the chart below:
The Rapid City metropolitan statistical area (MSA) continued its trend of leading the state’s metro areas in median household incomes for older adults. In 2016, the Rapid City MSA’s median household income for adults over 65 was $40,580. The Sioux City MSA landed in second place at $40,136 while Sioux Falls had the lowest median household income for seniors at $39,332.
*All figures reported in 2016 inflation-adjusted dollars.
Among South Dakota households, married couples with children earned the highest wages, with median household incomes of $90,000 in 2016, according to recently released data from the U.S. Census Bureau.* Nonfamily households earned the least in 2016, with median household incomes of $34,000. The median household income for all of South Dakota was $54,467 in 2016.
Disparities in earnings were present among single parents in South Dakota. In 2016, single men with children had median household incomes of $48,600, while single women with children had incomes of just $30,000. This disparity is present from 2012-2016, but narrowed in 2013 and 2014. In 2013, single fathers earned less than $15,000 more than single mothers, and in 2014, single fathers earned less than $7,000 more than single mothers.
A similar but less pronounced wage gap was apparent among men and women in the Rushmore State. In 2016, men earned median household incomes of $60,700 compared $48,300 earned by women. Like the trend seen in single fathers and mothers, this gap has also narrowed since 2013.
Median household incomes also varied by race. From 2012-2016, American Indian households earned $24,331 on average. Wages for American Indians mostly held constant over the previous reporting period of 2007-2011, in which the median household income was $24,331. Conversely, White households in South Dakota earned $54,745 on average from 2012-2016. Notably, while median income growth for American Indians remained stagnant from 2007-2016, other people of color (individuals identifying themselves as Black, Asian, or Hispanic) experienced a boost in income. From 2007-2011, people of color earned median household incomes of $35,475 from 2007-2011. From 2012-2016, the same households earned $39,200—an increase of 10.5%.
*All figures reported in 2016 inflation-adjusted dollars.
From 2016 to 2017, personal income in South Dakota grew by just 1.4%, according to a recent release by the Bureau of Economic Analysis. Only five other states had slower rates of personal income growth, Nebraska, Kansas, Iowa, Alaska and North Dakota.
A decline in farm earnings contributed to slow personal income growth in South Dakota as well as the region. Across the nation, farm incomes decreased by a total of 6.6%, with the largest declines occurring in South Dakota and North Dakota. In South Dakota farm incomes fell by 1.1%. But North Dakota was hit the hardest with farm incomes contracting by 1.9%. This contributed to an overall decline in personal income of 0.3% in North Dakota from 2016 to 2017.
Other states in the region were also impacted by falling farm incomes. In Nebraska, incomes from farm earnings fell by 0.9%, contributing to overall personal income growth of just 1.4% from 2016-2017. Similarly, Iowa’s personal income increased by just 0.3% in the wake of a 0.8% decline in farm incomes. The table below shows the impact of farm earnings on overall personal income growth for states in the region:
|State||% Change in Farm Earnings||% Change in Total Earnings 2016-2017|
The primary growth driver in the third quarter was the Finance and Insurance industry, which grew by 1.7%. Nationally, the Finance industry increased by 14.7% and was the top contributor to growth in seven of the ten fastest growing states. Several other industries also contributed to third quarter growth: Durable Goods Manufacturing (0.5%), Retail Trade (0.4%), and Health Care and Social Assistance (0.4%). The chart below displays contribution of earnings by industry to personal income growth from 2016 to 2017.
Personal income in South Dakota rose 0.1% between the second and third quarters of 2017, compared to a 0.7% increase for the nation, according to data released today by the U.S. Bureau of Economic Analysis (BEA). After ranking 44th in the nation in the second quarter of the year, the Rushmore State’s personal income growth was the slowest in the nation in the third quarter.
South Dakota’s disappointing performance was driven primarily by a 0.1% decline in earnings (wages and salaries, and proprietor’s income). Investment income rose 0.1%, and transfer receipts—payments under programs like Social Security—rose 0.4%.
South Dakota typically sees a surge in farm incomes during the third quarter of the year, but this year the state experienced a large drop in farm income due to severe drought conditions and low commodity prices. As a result farm incomes declined by 24.19% ($173 million) from the second to the third quarter of 2017. The state also experienced marginal declines in forestry, fishing and related activities (-0.54%), construction (-0.43%), retail trade (-0.23%), and arts, entertainment and recreation (-1.61%).
Transportation and warehousing (+2.22%) and information (+1.35%) were the largest contributors to personal income growth in the third quarter. Earnings in the government sector grew across all contributing sub-sectors including federal (+1.29%), military (+0.60%), and state and local (+0.53%).
The following sectors also contributed to third quarter growth:
|Health Care and Social Assistance||+1.12|
|Administrative and Waste Management Services||+1.03|
|Durable Goods and Manufacturing||+0.87|
|Finance and Insurance||+0.87|
|Nondurable Goods Manufacturing||+0.73|
Divergent trends in median household income and poverty rates occurred in two of South Dakota’s metropolitan areas, according to federal data. While poverty rates declined and median household incomes increased in the Sioux Falls Metropolitan Statistical Area (MSA), the opposite was true in the Rapid City MSA.
Rapid City Metropolitan Area
Alongside a rise in poverty rates in the Rapid City MSA—comprised by Custer, Meade and Pennington Counties—median household incomes declined. In 2015, the median household income for the Rapid City MSA was $53,477. In 2016, the median household income level dropped to $51,097. The largest drop in median income occured in Custer County, where median household incomes declined by $3,763, from $54,996 in 2015 to $51,223 in 2016. Similar declines occurred in Meade and Pennington County, which can be viewed in the table below:
|Median Household Income|
The increase in poverty rates and decline in incomes for the Rapid City MSA were opposite the trends seen across the state and its metropolitan areas in 2016. Statewide, the poverty rate fell slightly from 13.7% in 2015 to 13.3% in 2016. Median household incomes increased from $53,668 to $54,467 during the same timeframe. Additionally, the Sioux Falls and Sioux City MSAs saw slight decreases in poverty from 2015 to 2016.
Sioux Falls Metropolitan Area
The poverty rate in the Sioux Falls MSA dropped from 11.5% in 2015 to 8.9% in 2016. Median household incomes also increased from $60,602 in 2015 to $63,931 in 2016. Similar decreases in poverty and increases in median household incomes were true in the counties comprising the Sioux Falls MSA:
|Median Household Income|
In the first quarter of 2017, personal income grew by 0.6 percent in South Dakota, according to a recent release from the Bureau of Economic Analysis. This was one of the slowest quarterly growth rates in the country. In fact, South Dakota ranked 44th in the nation.
A major contributing factor to slow personal income growth in the Rushmore State was a contraction in the farming industry. During the first quarter, personal income in the farming industry actually declined by 0.5 percent. The limited personal income growth that did occur was driven by the construction industry, which increased by $87 million in the first quarter. Federal, state and local governments also contributed to personal income growth, rising by $43 million and $37 million, respectively.
Regionally, South Dakota outperformed Iowa, North Dakota, Minnesota and Nebraska. Personal income in North Dakota grew by just 0.2 percent while personal income in Nebraska declined by 0.1 percent, ranking the state last in the nation for personal income growth in the first quarter. First quarter personal income growth for the region can be viewed in the chart below:
|State||Percent Change from Previous Quarter||National Ranking|
For more information on personal income, visit the Bearfacts page on the Bureau of Economic Analysis website.
Real personal income in Sioux Falls grew faster than in all but three other metropolitan areas in the country in 2015, according to data released this week by the US Bureau of Economic Analysis (BEA). Adjusted for inflation, income received from all sources—including wages, rents and property incomes, and personal transfer receipts like Social Security or Veterans’ payments—rose by 6.9 percent in Sioux Falls, compared to 4.1 percent for the state as a whole.
South Dakota’s growth in real personal income matched the nation as a whole and exceeded all neighboring states. With a 2.3 percent drop, North Dakota was the only state in the union to experience a decline in real personal income.
Growth in real per capita personal income in Sioux City was 5.4 percent, compared to 3.3 percent in the Rapid City metropolitan region.
On a non-adjusted or nominal basis, per capita income in the Sioux Falls metropolitan area in 2015 was $53,769, compared to $50,221 in 2014. It rose from $44,134 to $46,514 in the Sioux City metropolitan region and from $43,481 to $44,775 in the Rapid City metropolitan area.
According to BEA data on the South Dakota Dashboard, economic growth (GDP) in each of the state’s three metropolitan area in 2015 lagged these increases in real personal income. In 2015, GDP increased 2.8 percent in Sioux City, 2.2 percent in Sioux Falls, and 1.0 percent in Rapid City.
Personal income in the Rushmore State grew by just 1.2 percent in 2016, ranking South Dakota No. 45 in the nation, according to a release from the Bureau of Economic Analysis (BEA). Overall, states experienced 3.6 percent personal income growth in 2016.
A downturn in farm earnings was responsible for slow growth in South Dakota and other Corn Belt states, while sharp declines in mining led to negative personal income growth in neighboring Wyoming and North Dakota. Wyoming experienced the slowest growth in both the region and nation with a drop of 1.7 percent. Minnesota experienced the highest personal income growth in the region with an increase of 3.0 percent, ranking the state 32nd in the nation. An overview of personal income in the region can be seen in the table below:
A significant decline of 2.6 percent in personal income growth from farm earnings occurred in South Dakota in 2016. Total earnings from the farming industry fell by nearly 57 percent or $1.056 billion dollars. Meanwhile, the state’s retail economy was undoubtedly affected by a $1.541 billion drop in personal income in Wyoming and North Dakota.
Despite the headwinds in agriculture and mining, other sectors in the South Dakota economy experienced significant positive growth. The biggest winners were construction, where personal income rose by $200 million or 10.1 percent and finance and insurance, which grew by $134 million, up 5.5 percent. Personal income growth derived from state and local government also rose by $160 million, up nearly 4.8 percent. The top ten industries contributing to personal income growth in South Dakota can be viewed below:
|Industry||Growth in Dollars||Percentage|
|Health Care and Social Assistance||275,000,000||6.8|
|Accommodation and Food Services||53,000,000||5.6|
|Finance and Insurance||134,000,000||5.5|
|State and Local Government||160,000,000||4.8|
|Federal Government (Civilian)||160,000,000||4.4|
To learn more about these estimates and see breakdowns for all major industries, view the full BEA release.
Personal income in South Dakota rose 1.4 percent between the second and third quarters of 2016, compared to a 1.1 percent increase for the nation, according to data released this week by the U.S. Bureau of Economic Analysis (BEA). After ranking 47th in the nation in the second quarter of the year, South Dakota’s personal income growth led all other states in the third quarter.
South Dakota’s growth was driven primarily by increases in wages and salaries and proprietor’s income, as compared to income from investments or government transfer payments under programs like Social Security. Improvements in farm income contributed 19 percent to the state’s total growth, followed by Finance and Insurance (17 percent), Health Care and Social Assistance (16 percent) and Government (14 percent).
South Dakota typically sees a surge in farm incomes during the third quarter of the year, and this year was no exception. Farm income grew by $80 million or 10.82 percent compared to the second quarter of the year. Other fast-growing sectors included Mining (up 3.48 percent), Transportation and Warehousing (up 3.27 percent), Management (up 3.57 percent), and Arts, Entertainment and Recreation (up 3.48 percent). No sectors experienced a decline in the third quarter.