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White House “Fact Sheet” on Minnesota income growth fails to report income declines in Mankato, St. Cloud, and Rochester

Yesterday the White House released a “Fact Sheet” touting growing incomes, falling poverty, and rising health coverage in Minnesota.

The fact sheet clearly aims to bolster the perception that all is well with the economy as the nation edges closer to electing the next President.  To that end, the White House could not help but embellish a few things.

The most noteworthy embellishment revolves around household income growth in Minnesota’s metro areas.  Here’s their spin:

The Minneapolis-St. Paul and Duluth metro area saw the fastest gains within the State, with typical households’ incomes rising 2.6 percent.

There are two major problems with this statement.  First off, it implies Duluth incomes rose right along with Minneapolis-St. Paul at a rate of 2.6 percent.  But, after reviewing the Census data myself, I found Duluth’s median household income grew by only 0.5 percent.

Second, the fact sheet failed to report that Minnesota’s three remaining Metropolitan Statistical Areas (MSAs)—Mankato, St. Cloud, and Rochester—all experienced a decline in median household income in 2015.  Mankato declined by 3.0 percent.  Thus, of Minnesota’s five MSAs, only Minneapolis-St. Paul experienced any real growth and though positive, this number is still less than the 3.8 percent average growth experienced nationwide.

By the way, that 3.8 percent number is not a typo.  The White House fact sheet reports 5.2 percent growth in income for the nation, but their number is from a different Census survey than the one used to develop the state and metro income estimates.  These surveys are not comparable.  They are constructed differently and use different sample sizes.  The Current Population Survey used to tout 5.2 percent income growth samples only 100,000 addresses, while the American Community Survey used for state and local estimates samples about 3 million addresses.  This larger, more accurate survey estimates the lower 3.8 percent income growth number I mentioned previously.

It’s hard to know what to make of these metro income numbers.  The BEA released 2015 GDP data for metro areas last week with almost a reversal in fortunes for Minnesota metros.  As the table below shows, Mankato lead Minnesota metros with 3.2 percent growth in GDP while Duluth’s economy shrunk by 4.1 percent, one of the largest declines in the nation.  Of 382 MSAs, the percent change in Duluth’s GDP ranked 379th.  Ultimately, it shows you can’t read too much into any single data point.

  Change in Median Household Income, 2014 to 2015 Change in Real GDP, 2014 to 2015

Duluth

0.5%

-4.1%

Mankato

-3.0%

3.2%

Minneapolis-St. Paul

2.6%

2.7%

Rochester

-1.0%

2.9%

St. Cloud

-2.3%

2.8%

Sources: U.S. Census Bureau, American Community Survey; and Bureau of Economic Analysis.

 

 

 

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