In the final quarter of 2022, personal income increased at an annualized rate of 7.3%—keeping pace with the national growth rate of 7.4%. Compared to a year earlier, incomes were up 7.7% in Arkansas and 5.7% for the U.S.
A breakdown by major components shows that Net Earnings provided a larger share of income growth in Arkansas than in the rest of the nation, with Transfer Receipts accounting for a smaller share of growth.
Netting out Transfer receipts, the major components of earnings all showed increases in the fourth quarter: The largest component, Wages and Salaries, increased at a rate of 6.9% in the fourth quarter and was up 9.0% from a year earlier. Dividends, Interest, & Rent increased at a 6.6% rate for the quarter and was up 4.6% from the fourth quarter of 2021. Proprietors’ Income surged at a 19.9% rate for the quarter and was up 35.0% over the year.
As shown in the figure below, most of the recent growth in proprietors income has been from the Farm component. In fact, total Farm Income accounted for over one-quarter of Arkansas personal income growth over the four quarters of 2022.
The importance of farm income is also highlighted in the breakdown of total earnings by industry for the fourth quarter. Growth in farm income contributed contributed 1.43 percentage points to the total earnings growth of 5.2% in Arkansas. In the U.S. data, Farm income comprised a much smaller share of growth. In other respects, the patterns of earnings contributions by industry were similar for Arkansas and the U.S.
Note: The Bureau of Economic Analysis released data on both Personal Income and Gross Domestic Product by State on Friday, March 31: Gross Domestic Product by State and Personal Income by State, 4th Quarter 2022 and Year 2022. The GDP data are discussed in a separate post.