Today’s report from the Bureau of Economic Analysis showed that total personal income increased by 7.0% in Arkansas in the second quarter of 2020 – an annualized growth rate of 31.3%. Arkansas’ growth rate was slightly slower than the 34.2% pace recorded for the United States and ranked #31 among the 50 states. Growth rates ranged from a low of 15.8% in Tennessee to 76.3% in Massachusetts.
The increases in personal income were driven entirely by Personal Current Transfer Receipts, with non-transfer income declining in all 50 states. In Arkansas, non-transfer income declined by 6.5% (an annualized rate of 23.4%), while transfer receipts increased by 51% (a 419% annual rate). Arkansas declines in wages and salaries (and supplements) were smaller than the U.S. average, while Proprietors’ Income and Dividends, Interest & Rent contracted more sharply than in the national statistics.
The increase in total personal income was somewhat less than projected in recent forecasts, due to a larger decline in non-transfer income and a smaller increase in transfer payments than had been expected.
Looking at a breakdown of earnings declines by industry, we see that Arkansas endured smaller declines than the U.S. in several industries that were directly affected by COVID-19 shutdowns, including Retail Trade, Health Care, Accommodation and Food Service, as well as Art, Entertainment & Recreation. The most significant sector of weakness for Arkansas was Farm Income, which fell to below zero for the quarter.
Revisions to Earlier Data
The statistics released this morning also included revised statistics for 2013:Q1 through 2020:Q1. The revisions were generally small, shifting Arkansas income levels slightly higher for 2015 through 2017, and slightly lower during 2019.
The effect of revisions on income growth rates was generally positive for 2015 and 2016, but resulted in slower reported growth for more recent periods. Through the first quarter of 2020, four-quarter growth was previously reported to be 3.4%. After revisions it is estimated to have been 3.2%.