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Economy in Brief

State Personal Income
by Charles Steindel  March 25, 2020

BEA has released the first estimates of state personal income for the fourth quarter of 2019 and for 2019 as a whole. Right now interest in these figures may be mostly antiquarian. For 2019 as a whole, the fastest-growing states were in the West, with Colorado's 6.1 percent increase the nation's largest. South Carolina was the only state in the eastern half of the nation to be in the top 10 for growth—and it was 10th. The Great Lakes was the slowest-growing region, with Wisconsin's 4.0% gain (29th in the nation) noticeably under the nation's 4.4% pace. West Virginia's 2.8% growth was the nation's lowest (West Virginia is classified as a Southeastern state).

In the fourth quarter, much of the West was still strong, with the Southwest seeing the highest growth rate of any region. The Great Lakes states did experience a marked rebound, most likely reflecting the end of the GM strike (Michigan's 4.7 percent rate of growth was the nation's highest). North Dakota, after seeing income grow at an 11.1 percent rate in the third quarter, was last in the fourth quarter, with a 1.1 percent rate of growth.

Of course, the first quarter is likely to see very different results, with outright declines possible. It may be that small energy-producing states will be unusually hard-hit, as will, of course, the states now largely sheltering in place. Presumably, the new legislation will greatly expand federal transfer payments, but those effects will not be seen until the second quarter. Some may be looking at the state income figures to get a sense of the vulnerability of revenues to the virus event, but the potential for major federal aid is arguably the key element in assessing public finances.

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