Ohio residents have increased the amount of money they put in their pockets the last few years.
New federal data shows that personal incomes in Ohio grew at a slightly faster rate than the national average in 2012, indicating an uptick in consumer spending and the demand for goods and services that drives job growth.
Total income in Ohio from wages, investments and other sources rose by 3.6 percent from 2011 to $40,057 per capita in 2012, according to the most recent data released Thursday by the Bureau of Economic Analysis. The average U.S. personal income grew by 3.4 percent from 2011 to $43,735 per capita in 2012.
The federal data indicates the third year of consecutive growth in per capita personal incomes for Ohio.
Thomas Traynor, a Wright State University economics professor, said the data shows continued growth at a slightly slower rate than prior years, but it indicates that the area economy is continuing to recover from the recession.
“It is certainly better than the previous decade,” Traynor said.
Traynor said per capita income from about 1999 to about 2008 was typically below the national average.
Per capita personal income is the total amount of income earned by a state’s residents divided by the state’s population. Ohio’s 11.5 million residents received $462.4 billion in personal income in 2012.
James Brock, a Miami University economics professor, said per capita personal income is an important economic indicator. “It gives you an idea of how well off or not so well off people are in a very aggregate, general way,” he said.
Southwest Ohio’s metropolitan areas all saw growth in per capita personal income in 2012. However, only the Cincinnati region surpassed the U.S. metro area average of 3.3 percent growth from 2011 to 2012.
Personal incomes in the Dayton region increased 2.98 percent from 2011 to $39,891 per capita in 2012. The region ranked 163rd out of 382 metro areas for per capita income.
The Springfield region saw 2.7 percent growth over the same period to $36,572 in 2012, ranking the area 239th for per capita income.
Personal incomes in the Cincinnati region rose 4.11 percent over that period to $43,454 in 2012, ranking the area 87th in the nation for per capita income.
The positive income trends, combined with recent area employment and unemployment figures, indicates that southwest Ohio’s economy is improving, Brock said.
“If unemployment falls and more people are working, then you would expect more people to be earning income, and you would expect income measures — say, per capita — to reflect that in a positive way,” he said.
The Dayton, Springfield and Cincinnati metro areas all have enjoyed three consecutive years of growth in per capita personal incomes. However, those growth rates slowed significantly from 2011 to 2012, compared to the 2010 to 2011 period.
Personal income typically sees rapid growth at the end of a recession, with a “large relative increase” after the economy has reached the bottom of its decline, Brock said. However, maintaining that same percentage rate of growth becomes more difficult as the economy improves, he said.
The slowing growth rate means “you are not having some crazy bubble take off that’s not sustainable,” Brock said. “It says to me that you are really building a solid foundation for the next few years.”
The Bureau of Economic Analysis’ first-ever comparison of inflation-adjusted incomes across states and metropolitan areas in intended to benefit people and businesses who are looking to relocate to another part of the country, said Thomas Dail, a bureau spokesman.
For example, a person can compare personal income rates to better understand how their salary may be affected by a job change or move. In addition, businesses now have a comprehensive and consistent measure of differences in the cost of living and the purchasing power of consumers nationwide, Dail said.