Global| Dec 17 2020State Personal Income in Q3 2020
|in:Viewpoints
Summary
State personal incomes fell back in Q3, reflecting the lessening of the extraordinary level of income support in Q2. Every state registered a decline, ranging from Georgia’s fractional 0.6% rate of loss to West Virginia’s 29.9%. In [...]
State personal incomes fell back in Q3, reflecting the lessening of the extraordinary level of income support in Q2. Every state registered a decline, ranging from Georgia’s fractional 0.6% rate of loss to West Virginia’s 29.9%. In general, poorer states such as West Virginia saw steeper declines—the Q2 aid, especially the $1200 checks, would have been substantially more important to their aggregate income than in higher-income states (among other things, a higher fraction of their populations would have received the full $1200).
More fundamentally, every state saw a rebound in Q3 in “net earnings”—employee compensation received by residents (less payroll taxes) plus proprietors’ income. Oklahoma and Wyoming were the only states in which the contribution to overall income of this aggregate was less than 10 percentage points; in Georgia the contribution was a full 25 percentage points, which accounts for aggregate income in the Peach State being nearly unchanged, despite the plunge in transfer payments.
Unsurprisingly, incomes earned in service industries that were effectively shut down in many parts of the nation in the spring rebounded in Q3. For instance, there was growth in real estate, health care, and accommodation and food services in every state, and only a few fractional declines in state income from some other industries, such as education and entertainment.
Charles Steindel
AuthorMore in Author Profile »Charles Steindel has been editor of Business Economics, the journal of the National Association for Business Economics, since 2016. From 2014 to 2021 he was Resident Scholar at the Anisfield School of Business, Ramapo College of New Jersey. From 2010 to 2014 he was the first Chief Economist of the New Jersey Department of the Treasury, with responsibilities for economic and revenue projections and analysis of state economic policy. He came to the Treasury after a long career at the Federal Reserve Bank of New York, where he played a major role in forecasting and policy advice and rose to the rank of Senior Vice-President. He has served in leadership positions in a number of professional organizations. In 2011 he received the William F. Butler Award from the New York Association for Business Economics, is a fellow of NABE and of the Money Marketeers of New York University, and has received several awards for articles published in Business Economics. In 2017 he delivered Ramapo College's Sebastian J. Raciti Memorial Lecture. He is a member of the panel for the Federal Reserve Bank of Philadelphia's Survey of Professional Forecasters and of the Committee on Research in Income and Wealth. He has published papers in a range of areas, and is the author of Economic Indicators for Professionals: Putting the Statistics into Perspective. He received his bachelor's degree from Emory University, his Ph.D. from the Massachusetts Institute of Technology, and is a National Association for Business Economics Certified Business EconomistTM.