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Income growth on Long Island beat inflation in 2018

Counties that are close to New York City,

Counties that are close to New York City, like Nassau, "tend to have very high incomes because residents are commuting to the city," one economist said. Credit: Howard Schnapp

Personal incomes on Long Island grew faster than inflation last year, federal officials said Thursday.

In Nassau County, per capita personal income was $89,839 in 2018, up 5.5% year over year. In Suffolk County, per capita personal income was $68,617, up 4.8% from 2017, according to estimates from the federal Bureau of Economic Analysis.

The inflation rate was 1.9% last year in the 25-county New York area, which includes Long Island.

BEA calculates per capita personal income by dividing personal income in a county by its population.

An economist at the Federal Reserve Bank of New York said Long Island, particularly Nassau, has benefited from its close proximity to high-paying jobs in Manhattan and strong employment growth in the city during 2017-18.

"Counties that are adjacent to New York City tend to have very high incomes because residents are commuting to the city for work," the economist said Thursday.

The economist cautioned that the Island's income growth may have slowed this year compared with 2018 because job growth in the city has slowed.

Nationwide, BEA said, per capita personal income for counties in metropolitan areas rose 4.9% on average from 2017 to 2018. That was slightly higher than the 4.1% increased between 2016 and 2017.

Nassau surpassed the national income rises in the past two years. Suffolk’s increase lagged between 2017 and 2018, figures show.

However, the New York Fed economist said the difference between Suffolk's income growth in 2017-18 and the nationwide rate "was such a small difference that it's not significant."

Retailers are attracted to the region because of the relatively high income compared with a nationwide average of $54,446 in 2018.

Nassau ranked No. 3 in the state in terms of personal income last year behind Manhattan and Westchester County. Suffolk was No. 5.

Statewide, per capita income averaged $68,668 last year, up 4.6% from 2017. In 2017 it was $65,644, up 7.2% from 2016.

E.J. McMahon, research director for the Empire Center for Public Policy, a conservative think tank in Albany, said the new per capita income data illustrates the stark economic differences between upstate and downstate. He said there is "continued economic weakness" in the region north of Westchester.

While Long Island's personal income stands out, its high costs do as well.

Nassau and Suffolk "are very expensive places," the New York Fed economist said. "You have to adjust the per capita income growth for living costs, such as home prices."

In Nassau, the median home sale price was $525,000 in September 2018, a 2.9 percent increase from a year earlier, according to the most recent comparable data from the Multiple Listing Service. In Suffolk, the median home sale price was $382,500, a 6.3% rise from September 2017.

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