Pa. lags behind N.J. in per capita spending

The report was the nation's first look at state-by-state spending.
The report was the nation's first look at state-by-state spending. (AARON M. SPRECHER / Bloomberg News)
Posted: August 09, 2014

When it comes to income and wealth, Pennsylvania is a step behind - once again.

A new report analyzing consumer spending in the 50 states and the District of Columbia finds Pennsylvania comfortably ensconced in the second tier. It is behind New Jersey and such high fliers as the nation's capital, New York state, with its Wall Street revenue, and even North Dakota, where a boom in energy development has boosted personal spending.

But it is ahead of its Midwestern neighbor, Ohio, and such states as Illinois and Rhode Island, the sick man of New England.

In the Mid-Atlantic region, Pennsylvania comes in dead last in terms of per-capita consumer spending, according to the report from the U.S. Commerce Department's Bureau of Economic Analysis. But its rate of growth since the start of the financial crisis in 2007 was the best in the region.

According to the BEA report, per-capita consumer spending in Pennsylvania grew about 14 percent since 2007 to $37,618, a faster rate of growth than in New York, New Jersey, and Delaware, faster even than in Washington, D.C., which at $59,423 had the highest consumer spending in the nation.

New Jersey's per-capita spending, which ranked in the top tier, rose to $42,654, an increase of 10 percent.

The lowest was in Mississippi, at $27,406.

That Pennsylvania is behind New York and Washington is hardly surprising, said Michael F. Smith, a chair of the department of Marketing and Supply Chain Management at Temple University's Fox School of Business. Pennsylvania doesn't have industries with explosive growth potential like the financial services sector in New York or the intense concentration of government employment in Washington and the services that feed off of it, he said.

But the state's concentration of hospitals and other medical-services providers, universities, and pharmaceutical companies functions as a substantial base and likely cushioned residents from the harsher effects of the recession. It may also have accounted for some of the growth that has occurred in recent years, Smith said.

Smith said the state's aging population may have also proved to be an economic boon, with its steady stream of Social Security income.

Moreover, the expansion of energy development through hydraulic fracturing has the potential to accelerate economic growth in Pennsylvania, he said.

"You have the whole fracking issue and what impact that will have in terms of revenue to the state," Smith said. "That will have a more measurable impact over the next five years."

The tables released Thursday were the first look by the federal government at state-by-state consumer spending trends, bureau spokeswoman Jeannine Aversa said. She said the bureau planned to begin releasing the data annually beginning in fall 2015.

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