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The Honolulu Advertiser
Posted on: Wednesday, April 25, 2001

Hawai'i income up but lags nationally

Advertiser staff and news services

Fueled by economic growth, Hawai'i personal income rose in 2000 at its fastest rate since the early 1990s, but the rise was boosted by inflation and lagged increases in other states.

The total income earned by Hawai'i residents was $137 billion last year, up 4.7 percent from 1999, the U.S. Commerce Department's Bureau of Economic Analysis reported in statistics released yesterday. That's the highest rate of increase since 1993.

The increase is less, however, when inflation is taken into account. "Real" inflation-adjusted income rose between 2.3 and 3.8 percent in each quarter of 2000, according to an analysis by Chris Grandy, an economist with the state Department of Business, Economic Development and Tourism. The analysis includes Grandy's updated estimate of inflation for the fourth quarter of 2000.

That still beats the late 1990s, when real personal income growth rates hovered around 2 percent and dipped as low as 0.6 percent in first-quarter 1999.

Americans' incomes rose faster than inflation in every state in 2000, even though the economy slowed dramatically in the second half of the year. Residents of Colorado enjoyed the fastest income growth, while states with among the slowest growth rates included Hawai'i and Alabama.

Nationally, average income for America's 281.4 million people last year was $29,676, up 7.3 percent from 1999, the quickest pace in 11 years, but the national average covered a wide variation in state performances, the Commerce Department reported.

By state, residents in Colorado had the sharpest income gain last year, rising 10.8 percent. Stronger earnings in the service sector, including construction, transportation and utilities, were a big factor.

Other states in the top five of income growth were: California, 10.5 percent; Massachusetts, 9.9 percent; New Hampshire, 9.5 percent; and Idaho, 9.3 percent.

In contrast, income growth was the slowest in Alabama, up 4.0 percent. Other states ranking the lowest in income growth included: Mississippi, 4.3 percent; Louisiana, 4.4 percent; Hawai'i; and West Virginia, 4.8 percent.

The inflation rate, as measured by the government's price index for personal consumption expenditures, was 2.4 percent in 2000.

• On the Web: State personal income report: www.bea.doc.gov/bea/newsrel/spi0401.htm