The Bureau of Economic Analysis released new state-level personal income data for the final quarter of 2019. Total personal income in Arkansas is estimated to have increased at a 2.7% annual rate, slightly lower than the 3.0% rate for the nation. Arkansas third-quarter growth was also revised from the previously-reported 6.5% down to 3.1%. For the four quarters from 2018:Q4 through 2019:Q4, Arkansas personal income increased 3.4%. Over the same period the nationwide total increased 4.1%.
Focusing on the fourth quarter, personal income gains were entirely in the nonfarm sectors, with farm income down at a 2.3% annual rate. However, the decline in farm income was tiny compared to the increase at annualized rate of 21,771% that was reported in the third quarter (revised up to nearly 29,000% in yesterday’s report). Annualized quarterly percent changes are not necessarily a revealing way to view a series that has been as volatile as farm income. The third quarter increase reflected increased payments associated with the Department of Agriculture’s Market Facilitation Program. The fourth quarter figures suggest that those payments continued to be relevant. For the year as a whole, Arkansas farm income was down 34% from 2018.
Earnings were up at a 3.6% rate, for both Arkansas and the U.S, with growth in wages and salaries, supplements, and proprietors’ income supporting that growth. Growth in dividends, interest and rent slowed to 1.1% and transfer receipts increased a rate of 2.09% — both lower than the corresponding national rates.
Growth in earnings accounted for 2.2% of the 2.7% personal income growth rate. Breaking down the contributions by sector, the largest gains — for both Arkansas and the nation — came from health care sector. Prominent gains in construction and in transportation & warehousing were also relevant. In Arkansas, management of companies and enterprises was also a contributing factor to growth.
Annual averages show that Arkansas personal income was up 3.9% in 2019, down from the 4.5% growth rate in 2018.
Nationwide, annual growth averaged 4.4%. Growth rates by state ranged from 6.1% in Colorado to 2.8% in West Virginia. Arkansas’ 3.9% growth rate ranked 32nd among the 50 states.