Some Good Economic News (Well, at Least About Cost of Living)
Economic data released by the Bureau of Economic Analysis (BEA) last April continued to show that income in Missouri just isn’t increasing very rapidly. The data also provide some good news: It is cheaper to live in Missouri than almost any other state in the union.
The BEA now adjusts nominal incomes at the state level for price-level differences across states. This is made possible by the development of regional price parities (RPP). Basically, the state RPPs measure geographic differences in prices; that is, comparable costs of living. The 2014 release marks the first time these series are being recognized as “official” statistics. What do the new data tell us about Missouri?
The chart below shows that growth in Missouri’s real personal income for 2011-12, the most recent years for which the data are available, falls in the next to lowest quintile of states. We have eight other low-growth cohorts, including neighboring states Nebraska and Kentucky. But the vast majority of states (and most of our neighbors) experienced faster growth in real personal income compared with Missouri.
The income data is disheartening. But the evidence about Missouri’s cost of living compared to other states strikes a definite positive note. The chart below shows that Missouri’s RPP in 2012 places it near the bottom of the ranking. And being at the bottom of this ranking is good news for a change. This means that the general level of prices in Missouri is below the national average and lower than all but three states.
Translation: While Missourians’ real incomes still are not rising as fast as we’d like, the cost of living in Missouri is less than nearly every other state. Maybe the BEA’s next release of this data, scheduled for July 1, 2015, will provide positive news on both fronts.