Arkansas’ personal income growth falls behind rest of the nation

Personal income growth in Arkansas totaled $92.958 billion in the first quarter of 2010, up 0.6% from the same quarter of 2009 and up 0.4% from the previous quarter.

Unfortunately, the gains were shallow compared to those in other states, with Arkansas ranked 47th in the nation out of 50 states.

Net earnings nationwide grew 0.7% in the first quarter, according to estimates released Friday (June 18) by the U.S. Bureau of Economic Analysis. For the U.S and 20 states, net earnings grew at the fastest pace since the recession began (in the fourth quarter of 2007).

Personal income increased in all but two states with growth ranging from 1.6% in Mississippi to a 2% decline in North Dakota. Inflation, as measured by the national price index for personal consumption expenditures, declined to 0.4% in the first quarter from 0.6% in the fourth quarter. Oklahoma posted first quarter personal income of $131.09 billion.

Also, federal stimulus dollars helped boost the numbers. American Recovery and Reinvestment Act (ARRA) transfer receipts rose to $113.5 billion in the first quarter and contributed 0.1% to U.S. personal income growth, the BEA noted in its report. Arkansas’ growth in first-quarter 2010 transfer receipts related to federal stimulus finding — which totaled $1.124 billion in the quarter — was 0.3%.

Michael Pakko, an economist at the University of Arkansas at Little Rock, provided the following analysis: “Among the 50 states, this growth rate was among the lowest in the country (47th). However, as indicated by the figure below, Arkansas personal income did not fall nearly as sharply during the recession as did incomes in much of the rest of the country. From the peak in 2008Q2, personal income in Arkansas fell by only 1.5% by the 2009Q3. Over the same period, personal income for the U.S. was down by 2.3% (at its lowest point, U.S. personal income was down by 2.7% in the 2009Q1).”

Personal income, according to the BEA, is the income received by all persons from all sources and is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars.

Major components of the first quarter 2010 Arkansas personal income ($92.958 billion) figure includes:
• Dividends, interest and rent: $14.359 billion
• Wage and salary disbursements: $44.174 billion
• Employer contributions for pension, insurance: $8.011 billion
• Farm income: $1.341 billion