State personal income growth accelerated to 1.8 percent in the first quarter of 2011, from 0.8 percent in the fourth quarter of 2010, according to estimates released today by the U.S. Bureau of Economic Analysis. Personal income increased in all states, with growth ranging from 0.7 percent in Iowa to 6.9 percent in North Dakota. Inflation, as measured by the national price index for personal consumption expenditures, increased to 0.9 percent in the first quarter from 0.4 percent in the fourth quarter of 2010.

A two-percentage point reduction in the personal contribution rate for social security accounted for most of the acceleration in first-quarter personal income growth in most states. The reduction in the contribution rate for social security is one of the provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

The wide range in the personal income growth rates between the farming states of Iowa and North Dakota reflects very different market conditions for crops and livestock. Farm income in some states, such as North Dakota, benefited from surging global wheat demand (which raised prices in the U.S. 18 percent in the first quarter) while farm income in other states, such as Iowa, plummeted because of rising livestock expenses and falling production.

Earnings by industry. Mining and durable-goods manufacturing were the best performing industries in the first quarter. Overall, mining earnings grew 5.5 percent and durable goods earnings grew 2.8 percent. Earnings in all other industries combined grew only 0.8 percent.

The mining industry (which includes oil and gas extraction) contributed more than any other nonfarm industry to personal income growth in six of the seven fastest growing states (North Dakota, Wyoming, Texas, Montana, Oklahoma, and Alaska). In Wyoming it contributed 0.7 percentage point to first-quarter personal income growth. Mining was also the major contributor to personal income growth in Louisiana and West Virginia.

In the state of Washington durable-goods manufacturing contributed one half percentage point to personal income growth in the first quarter of 2011. In another 25 states durable goods contributed a smaller, but still substantial, amount that was greater than that of any other nonfarm industry. Four of these states (Mississippi, New Hampshire, Washington, and Wisconsin) were among the fastest growing states in the first quarter.

Even with this recent strong growth, U.S. mining earnings remains 3.9 percent below its peak in the third quarter of 2008 and U.S. durable-goods earnings remains 4.7 percent below its peak in the second quarter of 2008.

All of the regional statistics underlying this news release along with mapping and charting software are available at http://www.bea.gov/regional/sqpi/.

NOTE.–Quarter-to-quarter percent changes are calculated from unrounded data and are not annualized. Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise specified. Quarter-to-quarter dollar changes are differences between published estimates.