The latest report on state-level personal income, released yesterday by the Bureau of Economic Analysis, shows that personal incomes in Arkansas increased at a 2.9% annual rate in the third quarter, following a revised second quarter decline of 26.9%. [The second quarter decline was originally reported as 29.8%.]
Arkansas growth rate was slightly higher than the national growth rate of 2.6%, and ranked 17th among the 50 states. Second quarter growth rates ranged from -4.3% in North Dakota to 6.7% in Kentucky.
The report from the BEA noted that, in general “increases in earnings and property income (dividends, interest, and rent) more than offset a decrease in transfer receipts.” The report also notes that states with the highest growth rates had the highest growth rates in earnings, while those with the slowest growth rates were slowed most by the nationwide decline in transfer payments.
For Arkansas, annualized earnings growth was 8.8%, accounting for 5.2 percentage points of total personal income growth. The most significant component of earnings growth came from Wages and Salaries, which grew at a 10.8% annual rate. Transfer Receipts declined, but that component had a smaller negative impact on personal income growth than it did in nationwide.
Cumulatively, the annualized growth of total Personal Income less Transfer Receipts over the past two years has been at 4.4% for Arkansas and 4.3% for the U.S.
A breakdown the components of earnings by sector shows that gains were widespread. The only sectors showing declines were Construction and Military. Farm income contributed positively to income growth in Arkansas, despite a nationwide decline.