Arkansas total personal income increased at an annual rate of 5.0% in the second quarter, slightly slower than the nationwide average of 5.4%. The increase was an improvement over the first quarter growth rate (revised) of 1.9%. Over the most recent four quarters, personal income has increased by 4.0%, compared with the U.S. growth rate of 4.9%.
The second quarter numbers featured sharp declines in farm income, which also had the effect of depressing total proprietors’ income. The news release from the Bureau of Economic Analysis noted that declining farm income was a leading contributor to earnings declines and slow growth across the agricultural heartland. The unusually sharp declines were in turn attributed to “smaller Market Facilitation Payments in the second quarter of 2019 than in the first quarter.” (The Market Facilitation Program is the major government support program that “provides assistance to farmers and ranchers with commodities directly impacted by unjustified foreign retaliatory tariffs, resulting in the loss of traditional export markets.”) Wages and Salaries increased at a 4.7% rate — approximately the same pace as the nation. Dividends, Interest and Rent increased at a rate of 8.2% and Personal Current Transfer Receipts were up at a 7.4% pace.
Today’s personal income release included annual revisions to the historical data. Data were revised as far back as 1998:Q1; however, substantive revisions were limited to the period from 2012 forward. For Arkansas, the revisions showed a consistently higher adjustment of the total income data, with generally positive effects on growth rates. In particular, the revised figures show higher growth in 2016 and 2018 than previously reported.
The cumulative effect of the revision was to increase the level of 2019:Q1 personal income in Arkansas by $2.2 billion. The upward revision was more than accounted for by higher estimates for Dividends, Interest and Rent, for which cumulative upward revisions totaled nearly $2.5 billion. Wage and Salary disbursements were marked up by $827 million and Personal Current Transfer Receipts were revised upward by $107 million. Farm income and proprietors’ income showed sharp downward revisions for 2018 and 2019:Q1. The cumulative impact of farm income revisions for the first quarter of 2019 totaled $1.47 billion.