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Economy in Brief

State Personal Income in Q2 2020
by Charles Steindel  September 24, 2020

The pandemic utterly dominated state income numbers in the second quarter. Every state saw a double-digit rate of decline in earnings from employment and noncorporate business. Every state saw a double-digit rate of growth in aggregate personal income, as the tidal wave of federal support swamped the collapse in earnings. The federal support, though, was not uniformly distributed by state. For example, New Jersey experienced a 63.0 % rate of growth in aggregate personal income, thanks to a more than 3000 % rate of increase in transfer payments. New York's income gain was barely one-third of New Jersey's, as transfer payments to Empire State residents rose at a "meager" rate of a bit over 800 %. BEA will be releasing on October 15 state data on the distribution of pandemic relief; at that point we may gain a bit more insight into what happened in the second quarter and what it may entail for income going forward.

The earnings data show declines in most major private sectors, outside of agriculture, resource extraction, utilities, and finance, in virtually every state. Retail trade, transportation, real estate, education, health care and social assistance, entertainment, and accommodation and food services were down everywhere.

While the raw aggregate numbers are quite uninformative, for what it's worth Massachusetts had the highest rate of growth of personal income, at 76.3 %, while Tennessee was lowest, at 15.8 %.

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