Guest blog post by Steve Landefeld, Director of Commerce's Bureau of Economic Analysis.
Off the top of your head, it probably seems obvious that the economies of America’s major cities differ structurally and behaviorally from our nation’s nonmetropolitan and rural areas, right? You are correct, indeed! But the really interesting question is, What can you learn about this from the Commerce Department’s Bureau of Economic Analysis? BEA measures our regional economies in several ways, including GDP by State, GDP by Metropolitan Area, State Personal Income, Metropolitan Area Personal Income and County Personal Income (AKA: Local Area Personal Income).
To understand the differences between the big, metropolitan areas and the rural parts of the country, your best bet is to turn to BEA’s Local Area Personal Income which details earnings in all 3,143 counties in the U.S.
Technically speaking, nonmetropolitan counties are those that are not part of a metropolitan statistical area, or MSA, as defined by the Office of Management and Budget. Population in these counties is generally less than 50,000 people. There are 2,032 nonmetropolitan counties in the U.S., almost twice the number of metropolitan counties. Of course, not all nonmetropolitan areas are rural, nor are all rural areas excluded from official designated metropolitan areas. Another important consideration is commuting patterns, certainly plenty of Americans live in areas which may be rural, but drive into MSAs to work which intertwines these economies. (What, you thought we’d make it that easy?) Some highlights from the data: Nonmetropolitan areas, including rural America, overall fared better than their metropolitan counterparts in terms of personal income in 2009. According to Local Area Personal Income statistics, released by BEA back in April, on average personal income fell 0.6 percent in nonmetropolitan counties compared to 1.9 percent in metropolitan counties.
Another interesting aspect is which industries are concentrated in nonmetropolitan areas. As you might expect, the economies in nonmetropolitan counties tended to be heavily dependent on industries that need large amounts of land and use natural resources like farming and mining. Nonmetropolitan counties accounted for 10 percent of overall national earnings, but a whopping 34 percent of the total in the natural resources sector. On the other hand, only about four percent of earnings in the information and professional services industries come from nonmetropolitan counties.
Overall, the folks in the more rural areas of the country did better as measured by Personal Income in 2009. Personal Income actually grew in 889 or 44 percent of nonmetropolitan counties in 2009 while it grew in only 39 percent of metropolitan counties.
On the other hand, in 2009, fully one half of all Personal Income earned in the U.S. was earned in the 103 most populated counties.
Want to learn more about the economy of your county? Check out BEA’s county level data here or read BEA’s in-depth coverage in the May 2011 edition of the Survey of Current Business or check out our quick county facts on your county here. Also, be on the look out for the next release of GDP by Metropolitan Area, which BEA will release on September 13.