Personal Income by State, 1st Quarter 2020
State personal income increased 2.3 percent at an annual rate in the first quarter of 2020, a deceleration from the 3.6 percent increase in the fourth quarter of 2019, according to estimates released today by the Bureau of Economic Analysis (table 1). The percent change in personal income across all states ranged from 4.9 percent in New Mexico to -0.3 percent in Michigan.
Increases in earnings contributed to personal income growth nationally and in 26 states plus the District of Columbia; while increases in transfer receipts and property income (dividends, interest, and rent) contributed to personal income growth in all states and the nation (table 2).
In New Mexico, the fastest growing state, the increase in transfer receipts was the leading contributor to personal income growth.
Earnings. For the nation, earnings increased 0.3 percent in the first quarter of 2020, after increasing 4.5 percent in the fourth quarter of 2019 (table 2). Earnings increased at the slowest pace since the first quarter of 2013 due to the partial economic shutdown following the outbreak of the COVID-19 pandemic in the first quarter of 2020.
The 2020 Q1 estimates of State Personal Income were impacted by the response to the spread of COVID-19, as governments issued "stay-at-home" orders. This led to rapid changes in employment and earnings as businesses switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending. BEA's quarterly state estimates of wages and salaries are typically based on monthly state data from the Current Employment Statistics (CES) survey. The reference period for the CES survey is the pay period that includes the 12th day of the month. The March 12, 2020 reference period for the CES survey preceded many of the COVID-19-related business closures and job losses. As a result, BEA used both March and April CES state level data to better capture business closures and job losses that occurred in March. BEA also used weekly state level Unemployment Insurance (UI) claims data to inform its 2020 Q1 state estimates of wages and salaries. The full economic effects of the COVID-19 pandemic cannot be quantified in the State Personal Income estimates for 2020 Q1 because the impacts are generally embedded in source data and cannot be separately identified.
Earnings increased in 15 of the 24 industries for which BEA prepares quarterly estimates (table 4). Finance and insurance; state and local government; and construction were the leading contributors to the overall earnings increase (chart 1). While earnings decreased in 9 industries including accommodations and food services; arts, entertainment and recreation; and healthcare and social assistance (chart 2).
The percent change in earnings across all states ranged from 2.3 percent in Utah and Texas to -3.8 percent in Nevada.
- State and local government was the leading contributor to the increase in earnings in Utah (table 3).
- Finance and insurance was the leading contributor to the increase in earnings in Texas.
- Accommodations and food service was the leading contributor to the decrease in earnings in Nevada.
Transfer receipts. Transfer receipts increased 10.1 percent for the nation in the first quarter of 2020, after increasing 3.1 percent in the fourth quarter of 2019. Transfer receipts accounted for $78.2 billion of the $108.2 billion increase in personal income for the nation. The increase in transfer receipts reflected a 1.6 percent cost of living adjustment for social security recipients; an increase in state unemployment insurance compensation; and an increase in refundable tax credits (such as the child tax credit and the Affordable Care Act premium tax credit) which are included in all other transfer receipts (chart 2). Transfer receipts increased in every state, ranging from 15.8 percent in New Mexico to 5.6 percent in Michigan.
Property income. Property income increased 2.3 percent for the nation in the first quarter of 2020, after increasing 1.3 percent in the fourth quarter of 2019. Property income increased in every state, ranging from 3.8 percent in Nevada to 1.1 percent in Connecticut.
Today, BEA also released revised quarterly estimates for 2019:Q1 through 2019:Q4. Updates were made to incorporate source data that are more complete and more detailed than previously available and to align the states with revised national estimates that were released on May 29, 2020.
Revised annual state personal income estimates for 2013 to 2019 will be released on September 24, 2020. In addition, revised estimates for 2013:Q1 through 2020:Q1, and preliminary estimates for 2020:Q2 will also be released. The October 2020 Survey of Current Business will contain an article that describes the results.
Personal Income by State, 2nd Quarter 2020 and Year 2019