Gross domestic product (GDP) means:
…total value of goods and services produced during a period not including foreign earned income.
Bureau of Economic Analysis (BEA) 2014 data on changes in GDP in Missouri and the other six (6) Plains States shows an average 1.3 percent growth, considerably lower than the 2.2 percent national average.
- Missouri 0.9
- North Dakota 6.3
- South Dakota 0.6
- Nebraska 0.7
- Kansas 1.8
- Iowa 0.4
- Minnesota 1.4
But there is a side to the economic story besides GDP. Alan Cole and Scott Drenkard wrote July 8, 2015 about “The Real Value of $100 in Each State.”
The value of goods purchased for every $100 spent varies from state to state and the District of Columbia.
Cole and Drenkard noted the often direct relationship between higher income and higher prices, but not always. For example, North Dakotans earn higher income but pay lower prices.
Adjusting incomes for price level can substantially change our perceptions of which states are truly poor or rich.
Nationwide the District of Columbia had lowest purchasing power per $100 based on 2013 numbers – at $84.96; and Mississippi had the greatest with $115.21.
Median household income (2014) in the District of Columbia is fifth highest in the country at $65,124, yet the high cost of goods and services reduces purchasing power by almost $10,000.
On the other hand, Mississippi has the lowest median income (2014) among the fifty states and the District of Columbia – at $36,919. Yet, lower prices increase its purchasing power by more than $5,600.
Likewise, Missouri’s relatively low prices increase purchasing power of its median income (2014) of $45,247 by nearly $5,500.
The seven (7) Plains States enjoy greater purchasing power than most states with higher median incomes. For each $100 spent, value of goods and services is:
- Missouri $112.11
- North Dakota $109.41
- South Dakota $114.16
- Nebraska $110.50
- Kansas $110.13
- Iowa $110.74
- Minnesota $102.46
Average nationwide personal income growth was 0.9 percent. The private sector suffered 0.6 percent income loss compared to the last quarter (Oct-Dec) 2014, but government sector income grew by 0.5 percent in the same period.
Farm income declined in the Plains States of South Dakota, Nebraska, Kansas and Iowa. Iowa personal income declined 1.2 percent in the first three months of the year, more than any other state.
Missouri personal income increased by about one percent, and Minnesota personal income increased by less than one percent.