Today's Indicator

Personal income per capita is a measure that is widely accepted among economists and policy analysts as an indicator of economic well-being of residents of a city or a state. The level of per capita personal income can be used as a broad gauge for measuring the relative economic performance of two or more cities, regions or states. Also, growth in relative per capita personal income is used as evidence that cities are becoming more or less wealthy, as compared to a national or regional benchmark.
Fitch IBCA indicates that for a predominantly residential community’s tax base to constitute the basis of an above-average general obligation bond rating, per capita income levels are generally at or above average. A strong and diverse commercial component in the tax base (40% or higher), however, can bolster an otherwise average residential income base, supporting an above average rating. Standard & Poor’s considers median household or per capita income levels of <=75% the national average very low; 85% low; 100% average; 120% high; and >=140% very high.
Policymakers should be interested in using per capita income growth as an indicator to guide broadly defined policy measures, it is important to determine which factors are most likely to influence growth in per capita income. Such an analysis should also indicate whether these factors influence short-term or long-term growth, and whether they are amenable to local policy initiatives.