Personal income in Tennessee grew faster than any state in the Southeast last year, providing the typical Tennessean the biggest yearly gain in pay and investment earnings in more than a decade.
After three years of relatively stagnant growth in per capita income during the recession, per capita income in Tennessee rose 4.6 percent in 2011, according to a new report from the U.S. Bureau of Economic Analysis. The average Tennessean earned $36,533 last year, up $1,612 from 2010.
Tennesseans, on average, still earned nearly 13 percent less than the per capita U.S. average income of $41,683, government figures show. But for the second year in a row, Tennesseans gained ground on their counterparts in Georgia and took home bigger paychecks, on average.
In Georgia, per capita income rose last year by 3.9 percent to $36,104.
"Tennessee appears to be coming out of the recession stronger than neighboring states," said Bill Fox, director of the Center for Business and Economic Research at the University of Tennessee. "As a more manufacturing-based state, we are benefiting more by the economic recovery, and Tennessee isn't suffering as much from the decline in real estate as many coastal states."
Three billion-dollar-plus investments in Tennessee during the past four years --Volkswagen in Chattanooga, Hemlock near Clarksville and Wacker Chemical near Charlston -- are still adding jobs and supplier spin-off businesses, Fox said. Other manufacturers in the state such as Nissan in Smyrna, Whirlpool in Cleveland and Amazon.com in five new locations are collectively adding more than 5,000 more jobs.
Tennessee's 4.6 percent gain in per capita income last year helped most workers to gain ground in the inflation battle. The consumer price index, which measures the inflation rate for most goods and services, rose 2.5 percent during 2011, up from 1.8 percent in 2010, according to the U.S. Bureau of Labor Statistics.
Last year, Tennessee added 46,400 more jobs, the BLS said. But Tennessee's employment in 2011 still averaged 122,200 fewer jobs than the peak year of 2007.
Tennesseans, like most Americans, suffered an unusual drop in per capita income during 2009 in the wake of the worst economic downturn since the 1930s.
Over the past decade, per capita income in Tennessee has grown at about a 3 percent annual pace, while inflation has averaged 2.5 percent a year, government figures show.