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Personal income continued to grow slowly in third quarter 1990.

Personal Income Continued To Grow Slowly in Third Quarter 1990

Personal Income in the Nation grew 1.2 percent in the third quarter of 1990, about as much as in the second quarter (1.3 percent) but substantially less than in the first quarter (2.1 percent).(1) The slow third-quarter growth in personal income was most noticeable in the Plains region, where farm income declined, and in New England, where nonfarm income was weak. Growth was slightly below the U.S. average in the Rocky Mountain region, equal to the average in the Mideast and Great Lakes regions, and above the average in the Southeast, Southwest, and Far West regions. (For estimates by State, see "State Personal Income, Summary Estimates for Third Quarter 1990" on pages 41 and 42.)

In New England and the Southwest, the pattern of income growth in recent quarters differs from that in most of the 1980's. In New England, income has grown slower than the U.S. average for the past seven quarters after having grown faster than average in most of the 1980's. In the Southwest, income has grown faster than the U.S. average for the past two quarters after having grown slower than average in most of the 1980's. Prior to 1990, the Southwest had not had two consecutive quarters of above-average growth since 1982.

Income growth by region

In the Plains region, personal income grew 0.3 percent in the third quarter after increasing 0.9 percent in the second quarter and 2.0 percent in the first. In all three quarters, income growth was below the U.S. average. The slow third-quarter growth mainly reflected a decline in farm income, as Federal farm subsidy payments fell for the second consecutive quarter. In addition, payroll gains were below the U.S. average in durables manufacturing, in the transportation-public utilities group, and in services (table 1). Three Plains States--North Dakota, South Dakota, and Nebraska--were the only States in the Nation that had substantial declines in personal income; income growth was less than or equal to the U.S. average in the other Plains States.

In New England, personal income grew 0.6 percent in the third quarter after increasing 1.1 percent in the second quarter and 0.8 percent in the first. The slow third-quarter growth reflected payroll declines in durables manufacturing, in construction, and in wholesale and retail trade. Moreover, payrolls in nondurables manufacturing, in the transportation-public utilities group, in the finance-insurance-real estate group, and in services grew slower than in any other region. Connecticut was the only State in New England with above-average growth in personal income.

In the Rocky Mountain region, personal income grew 1.1 percent in the third quarter after increasing 1.6 percent in the second quarter and 1.4 percent in the first. The slow third-quarter growth reflected a decline in farm income; both Federal farm subsidy payments and farm income excluding subsidies fell. In contrast, the region's nonfarm economy showed strength; payrolls grew faster than the U.S. average in manufacturing, in construction, in mining, and in nearly all private service-type industries.(2) By State, personal income changed little in Montana and Idaho, largely reflecting sharp declines in farm income; income growth was above average in the other Rocky Mountain States.

In the Mideast, personal income grew 1.2 percent in the third quarter after increasing 1.4 percent in the second quarter and 1.6 percent in the first. In the third quarter, strength in nonfarm proprietors' income offset weakness in payrolls. Payrolls declined in retail trade and, for the sixth consecutive quarter, in durables manufacturing and in construction. In nondurables manufacturing, in wholesale trade, in the finance-insurance-real estate group, and in services, payroll gains were below the U.S. average. By State, personal income growth was below the U.S. average in Delaware and New Jersey, equal to the average in Pennsylvania and New York, and above the average in Maryland.

In the Great Lakes region, personal income grew 1.2 percent in the third quarter after increasing 1.5 percent in the second quarter and 1.6 percent in the first. In the third quarter, weakness in payrolls in nondurables manufacturing, in government, and in services offset strength in payrolls in the other private service-type industries, in construction, and in durables manufacturing. Within durables manufacturing, strength in motor vehicles was partly due to less downtime to retool for model changeovers than is usual for a third quarter; less downtime was needed because manufacturers had retooled for a number of 1991 models earlier in 1990. By State, personal income growth was above the U.S. average in Michigan and Ohio, partly reflecting the strength in motor vehicles; income growth was less than or equal to the average in the other Great Lakes States.

In the Southeast, personal income grew 1.3 percent in the third quarter after increasing 1.1 percent in the second quarter and 2.7 percent in the first. The third-quarter growth reflected payroll gains in retail trade, in the finance-insurance-real estate group, and in services. In contrast, payrolls in construction declined for the second consecutive quarter. By State, personal income growth was above the U.S. average in Florida, South Carolina, Tennessee, Louisiana, and Virginia and below the average in Arkansas, West Virginia, Kentucky, Mississippi, Georgia, Alabama, and North Carolina.

In the Southwest, personal income grew 1.5 percent in the third quarter after increasing 1.8 percent in the second quarter and 1.7 percent in the first. The above-average third-quarter growth reflected strong payroll gains in all industry groups except for services and the finance-insurance-real estate group. Personal income growth was above the U.S. average in all Southwest States except Oklahoma.

In the Far West, personal income grew 1.7 percent in the third quarter after increasing 1.1 percent in the second quarter and 3.3 percent in the first. The above-average third-quarter growth reflected payroll gains in nondurables manufacturing and in all private service-type industries. In contrast, payrolls in durables manufacturing and in construction declined for the second consecutive quarter. Personal income growth was above or equal to the U.S. average in all Far West States. [Tabular Data Omitted]

(1)Percent changes shown in this article are not at annual rates. (2)The term "private service-type industries" refers to transportation and public utilities; wholesale trade; retail trade; finance, insurance, and real estate; and services.
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Title Annotation:Regional Perspectives
Publication:Survey of Current Business
Date:Jan 1, 1991
Words:1074
Previous Article:Gross product in industry, 1977-88: a progress report on improving the estimates.
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