June 22, 2021
In the first quarter 2021, state personal income rose 59.7% at an annual rate relative to a decline of 3.9% in the fourth quarter of 2020 according to estimates released by Bureau of Economic Analysis (BEA). The BEA also noted, “In the first quarter of 2021, the increase in transfer receipts was the leading contributor to personal income growth in all states and the District of Columbia. The percent change in personal income across all states ranged from 89.3% in Mississippi to 31.1% in the District of Columbia.”
Earnings climbed 6.1% in the first quarter of 2021, after rising 11.5% in the fourth quarter of 2020. Earnings increased as a result of the ongoing economic recovery following the partial economic closure that began in the first quarter of 2020 with the onset of the COVID-19 pandemic.
The leading contributors to the nation’s overall growth in earnings were Finance and insurance; professional, scientific, and technical services; and durable manufacturing. Earnings changed by 11.1% in Texas and –10.2% in South Dakota across all states.
Earnings in Michigan and eight other states, including Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Tennessee, and Texas, have risen in part as a result of profit-sharing payments made by automakers to workers represented by the United Auto Workers union. Earnings declines in South Dakota and five other states, including Iowa, Montana, Nebraska, North Dakota, and Wyoming, were largely the consequence of reduced Coronavirus Food Assistance Program payments to farmers.
In the first quarter of 2021, property income fell by 0.1% for the nation after increasing 5.8% in the fourth quarter of 2020. Moreover, the percent change in property income ranged from 1.4% in South Dakota to –1.7% in Georgia across all states.
Transfer receipts rose $2.3 trillion for the nation in the first quarter of 2021, accounting for almost all the growth in personal income. The growth in transfer receipts mainly revealed increases in state unemployment insurance compensation and in all other transfer receipts. BEA noted, “State unemployment insurance compensation was boosted by a temporary $300 increase in weekly benefits provided by the American Rescue Plan Act. The increase in all other transfer receipts reflected the $600 economic impact payments to individuals provided by the CRRSA Act and the $1,400 economic impact payments provided by the American Rescue Plan Act. Transfer receipts increased in every state and the District of Columbia, ranging from $251.9 billion in California to $3.8 billion in the District of Columbia.”
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