WASHINGTON – U.S. personal income grew 1.8 percent in the second quarter, as income growth accelerated in all but five states, the U.S. Bureau of Economic Analysis reported today. “The second-quarter growth was the highest since the first quarter of 2007 and more than double the 0.8-percent pace of the first quarter of 2008,” the BEA said.
But, it added, “almost all of the acceleration” – 0.9 percentage points of the 1-percentage-point acceleration from the first quarter’s growth – “is accounted for by the cash rebates taxpayers received from the federal government this spring under the provisions of the Economic Stimulus Act of 2008.”
Nationwide, net earnings grew 0.8 percent compared with the first quarter, after growing 0.7 percent in the first three months of the year; property income rose 0.2 percent, after falling 0.1 percent in the first quarter; and transfer receipts – including the federal stimulus payments – grew 8.3 percent, or 3.6 times the first quarter’s 2.3-percent growth.
New England ranked last among the eight BEA regions, with personal income growth of 1.2 percent. Elsewhere, personal income growth ranged from 1.5 percent in the “Mideast,” Plains and Rocky Mountain regions to 2.7 percent in the Southwest.
Rhode Island – where personal income grew 1.3 percent compared with the preceding quarter, after rising 1.0 percent in the second quarter – ranked third in New England and 43rd nationwide. It was trailed by New Hampshire, 44th nationwide, and Massachusetts, 45th, where second-quarter income growth also amounted to 1.3 percent.
Leading the region were Maine, 33rd nationwide with personal income growth of 1.6 percent, and Vermont, 38th nationwide with income growth of 1.4 percent. Connecticut, with income growth of only 1.0 percent, ranked last in the region and 50th nationwide. tied with Minnesota for last place nationwide.
For total personal income, New England ranked seventh among the eight regions with $699.61 billion in the second quarter, while Rhode Island was 42nd among states with $43.43 billion, Massachusetts was 12th with $330.82 billion and Connecticut was 23rd with $197.99 billion. Vermont was last, with $24.20 billion and California was No. 1 with $1.575 trillion.
Among the 24 industries tracked by the BEA, the fastest earnings growth compared with the second quarter was in professional services, state and local government and health care industries, which together added 0.4 percentage point to the quarter’s personal income growth. Meanwhile, declines in construction and retail earnings shaved about 0.1 percentage point from the personal income growth rate in the second quarter, the bureau said.
Additional information, including the quarterly “State Personal Income” report, is available from the U.S. Department of Commerce’s Bureau of Economic Analysis at www.bea.gov.
