U.S. Personal Income Rose 5.3% in ‘85, Commerce Says

Americans’ personal income rose 5.3% last year with residents in Nebraska and New England making the biggest gains while Western energy states suffered the slowest growth, the government said Monday.

The nationwide gain was identical to the 1984 increase and left the income level at an average of $13,451 for every person in the country last year. The gain put income growth slightly ahead of a 3.8% increase in consumer prices last year.

The New England region outperformed the rest of the country with a 6.6% jump in incomes, which pushed per-capita earnings there to $15,387--14% above the national average.

The healthy New England income growth was explained by the lowest unemployment rates in the country and booming business for the region’s high-technology and defense industries.

“Many New England companies are in the vanguard in the production of high-tech items, and they tend to have labor shortages for high-skilled workers,” said Commerce Department analyst Rudolph DePass. “The region has done quite well since the 1981-82 recession because they have a favorable industrial mix and a lot of the old-line industries that held the region back are no longer there.”

The biggest income growth for a single state was in Nebraska, but analysts attributed most of the 9% increase to large government purchases of surplus farm commodities. Without the increase in farm incomes, Nebraska’s income growth would have been 5.6%.

Nebraska was followed by the New England states of Vermont, up 7.1%; Massachusetts, up 7%, and New Hampshire, up 6.9%. Also in the top 10 were Virginia, with income growth of 6.6%; Connecticut and Minnesota, both with 6.5% increases; New Jersey, up 6.4%; Maryland, 6.3%, and New York, 6.2%.

California posted an income growth of 5.4% and per-capita income of $15,255, sixth-highest in the nation.

The Rocky Mountain region had the slowest income growth of any area last year, a 4.1% increase that barely outdistanced inflation. Income growth in this area has been held back by slumping energy prices, which have forced many petroleum companies to cut back on drilling and exploration.

By state, Montana had the weakest growth last year, 1.1%, followed by Alaska with a 1.2% gain.

Other states with income gains below the 3.8% nationwide rise in inflation were Louisiana, up 2.6%; South Dakota, up 2.8%, and Kentucky, up 3.4%. The slow growth in these areas was linked to either a slump in energy production, including coal, or weakness in farm incomes.

The rest of the bottom 10 included Hawaii, up 3.9%; South Carolina, Washington state and Mississippi, all up 4%, and Oklahoma with a 4.1% increase.