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Personal income by state and region, third quarter 1992.

PERSONAL INCOME in the Nation increased 0.7 percent in the third quarter of 1992; it had increased 1.0 percent in the second quarter and 1.5 percent in the first.(1)

In the third quarter, personal income growth slowed in 38 States and picked up in 12 States. The States with the sharpest slowdowns were Hawaii, Florida, Louisiana, North Dakota, South Dakota, Wyoming, Montana, Michigan, Idaho, and Vermont. In Hawaii, the slowdown reflected the impact of Hurricane Iniki, and in Florida and Louisiana, the slowdowns reflected the impact of Hurricane Andrew. In North Dakota, South Dakota, Wyoming, and Montana, the slowdowns were largely in farm income. In Michigan and Vermont, the slowdowns were largely in manufacturing and construction payrolls. The States with the sharpest pickups in income were Iowa and Alaska; the pickups were spread across most industries. (See tables 1 and 2 at the end of this article.)

Income Growth During the Recovery and the Recession

In the six quarters of recovery following the business cycle trough in the first quarter of 1991, personal income in the Nation increased at an annual rate of 4.4 percent. U.S. prices measured by the fixed-weighted price index for personal consumption expenditures increased at an annual rate of 3.2 percent. By comparison, in the three quarters of recession following the business cycle peak in the second quarter of 1990, personal income in the Nation increased at an annual rate of 3.2 percent, and U.S. prices increased at an annual rate of 5.6 percent.

During the recovery, increases in personal income equaled or exceeded the increase in U.S. prices in all States except Hawaii and Florida, which were struck by hurricanes in the third quarter of 1992. During the recession, increases in personal income equaled or exceeded the increase in U.S. prices in only 11 States.

Fastest growing States

During the recovery, the annual rate of increase in personal income in the 10 fastest growing States ranged from 7-3 Percent in Montana to 5.6 percent in New Mexico (table A). [TABULAR DATA A OMITTED]

In 8 of the 10 States--Montana, Tennessee, Utah, Kentucky, Washington, Colorado, Wisconsin, and New Mexico--personal income also had grown fast during the recession (chart 1). During the recovery, each of these States had above-average changes in farm income and above-average increases in payrolls in construction, in the transportation-public utilities group, in retail trade, and in services. In addition, most of these States had above-average increases in payrolls in wholesale trade, in the finance-insurance-real estate group, and in government. During the recession, all eight States had above-average changes in payrolls in construction and above-average increases in payrolls in wholesale and retail trade and in services.

In Idaho and North Carolina, personal income grew fast during the recovery after growing slowly during the recession. In Idaho, farm income and payrolls in durables manufacturing increased faster than average after declining. In North Carolina, payrolls in nondurables manufacturing, in retail trade, and in government increased faster than average after declining.

In North Carolina and Kentucky, military payrolls rebounded from low levels in the first quarter of 1991, primarily as a result of Operation Desert Storm (the compensation of military personnel assigned abroad is excluded from State personal income).

Slowest growing States

During the recovery, the annual rate of change in personal income in the 10 slowest growing States ranged from a decline of 1.2 percent in Hawaii to increases of 3.8 percent in New Jersey, Iowa, and California (table B). In 5 of the 10 States--New Jersey, California, Maryland, Massachusetts, and Connecticut--personal income also had grown slowly during the recession. During the recovery, each of these States had declines in payrolls in durables manufacturing and in construction and below-average increases in payrolls in retail trade and in services. The declines in manufacturing payrolls partly reflected a cutback in U.S. defense spending, and the declines in construction payrolls partly reflected oversupply of commercial and residential structures. In addition, most of these States had below-average changes in payrolls in nondurables manufacturing and in the transportation-public utilities group. During the recession, all five States had declines in payrolls in durables manufacturing, in construction, and in retail trade, and they had below-average changes in payrolls in services. [TABULAR DATA B OMITTED]

In Iowa, Delaware, Virginia, and Florida, personal income grew slowly during the recovery after growing at above-average rates during the recession. In Iowa, farm income declined after increasing; the decline was due to the timing of Federal corn subsidy payments to farmers, which are generally made in the first or second quarter of the year. In Delaware and Virginia, changes in payrolls in wholesale trade and in services were below average after having been above average. In Delaware, payrolls in nondurables manufacturing declined after increasing faster than average; the decline mainly reflected weakness in the chemicals industry. In Florida, the slowdown in income growth reflected the impact of Hurricane Andrew on payrolls, proprietors' income, and rental income of persons.

In Hawaii, personal income declined during the recovery after growing fast during the recession. The turnaround reflected the impact of Hurricane Iniki. Tables 1 and 2 follow. (1.) These percent changes are not annual rates.
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Author:Friedenberg, Howard L.; Tran, Duke D.
Publication:Survey of Current Business
Date:Jan 1, 1993
Words:871
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