New data from the Bureau of Economic Analysis released today shows that Arkansas personal income declined by 5.5% in the third quarter — corresponding to a -20.3% annual rate. Nationwide, personal income was down 2.6% (a 10.0% annual rate). The BEA reported that income was lower in all 50 states, with annualized percent declines ranging from -0.6% in Georgia to -29.9% in West Virginia.
The third quarter declines were driven primarily by decreases in personal current transfer receipts as the impact of CARES Act relief payments declined from their second-quarter surge. Revised data showed that transfer receipts in Arkansas rose 57.0% in the second quarter and declined by 24.6% in the third. The national averages showed a second-quarter increase of 75.4% and a third-quarter decline of 23.0%.
After the second-quarter increases and third quarter declines, Arkansas personal income was up 4.1% relative to Q1, with the corresponding U.S. total up 5.1%.
Net of transfer payments, Arkansas personal income categories generally showed encouraging increases in the third quarter. All major components of earnings increased in Q3, with Proprietors’ Income rebounding sharply from its decline in the second quarter. Dividends, Interest, and Rent was down slightly.
In addition to the increases in third-quarter earnings, today’s report contained some relatively large revisions to data from the second quarter. Most encouraging, wage and salary disbursements were revised 4.0% higher than originally reported. The surge in transfer receipts in the second quarter was also revised higher for Arkansas.
Net of transfers, the third quarter data show significant recovery from the sharp declines in the second-quarter. Compared to the first quarter of the year, Arkansas Personal Income Less Transfer Payments was down by only 0.3% in Q3. Nationwide, Income less transfers was down 1.0%.