Global| Mar 24 2021State Personal Income in Q4 2020
|in:Viewpoints
Summary
State personal incomes were wildly erratic in the 2020:Q4, with annual rates of growth ranging from South Dakota’s 16.7 percent to -16.1 percent in both Rhode Island and Pennsylvania. Two sharply divergent forces were at work: the [...]
State personal incomes were wildly erratic in the 2020:Q4, with annual rates of growth ranging from South Dakota’s 16.7 percent to -16.1 percent in both Rhode Island and Pennsylvania. Two sharply divergent forces were at work: the ongoing pullback in transfer income, following the enormous spike in the second quarter, vs. reopenings and regained net earnings, which varied widely by industry and state. In general, income gains occurred in smaller states with less diversified economies—thus, Plains states generally saw increases in personal income. Income losses were larger in the Northeast, as exemplified by Pennsylvania and Rhode Island, while New York, New Jersey, and Massachusetts saw drops nearly as large. Nevada and Hawaii experienced rates of decline in excess of 15 percent, as travel and leisure activity remained depressed. A quite varied mix of states (Michigan, Illinois, Louisiana, and Georgia) were the others to see rates of decline greater than 10 percent.
The fourth quarter was in sharp contrast to 2020 as a whole. The surge in transfer payments resulted in increased income from 2019 for every state, with the range of growth extending from 2.4 percent (Wyoming) to 8.4 percent (Arizona and Montana). Net earnings, though, were much weaker: many states saw declines, led by New York’s 2.3 percent. A plunge in earnings in construction, retailing, and administrative and waste management services was particularly evident in New York. With offices closed, and little interest in refurbishing them, and few visitors to high-end merchants, the Empire State suffered. On the flip side, earnings in Utah grew an impressive 5.2 percent, with strength in many sectors.
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.