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Regional perspectives: total personal income growth in recent quarters.

REGIONAL PERSPECTIVES

Total Personal Income

Growth in Recent Quarters

A marked strengthening in manufacturing and mining payrolls in the Rocky Mountain region led to an acceleration in the growth of the region's total personal income that began in the second quarter of 1988. The strengthening in manufacturing in part reflected growth in the production of transportation equipment. In the mining industry, metal production surged. From the third quarter of 1988 to the third quarter of 1989, personal income growth in the Rocky Mountain region (8.7 percent) topped the U.S. average growth (8.5 percent) for the first time since late 1983 (chart 5). In the mid-1980's, weak growth in commodity-producing industries had dampened growth.

In contrast with the accelerating growth in the Rocky Mountain region, growth in New England has been decelerating since early 1988. The deceleration reflects slowdowns in the growth of payrolls in construction and private service-type industries, especially business, financial, and professional services. Over the last year, personal income growth in New England (8.2 percent) was below the U.S. average, after having been above average for most of the 1980's. Earlier in the 1980's, a surge in economic activity stemming from the national defense buildup and strength in high-technology industries had boosted growth.

Other regions with above-average

growth

In the Plains region, total personal income grew 9.2 percent, 0.7 percentage point above the U.S. average of 8.5 percent, from the third quarter of 1988. to the third quarter of 1989 (table 1). Farm income rebounded from low levels during the drought of 1988, and manufacturing payrolls were strong.

[Tabular Data Omitted]

In the Far West, above-average growth in total personal income (9.1 percent) reflected strength in payrolls in manufacturing, private service-type industries, and construction. Manufacturing payrolls in Washington benefited from gains in aircraft production. Construction payrolls grew faster in Nevada than in any other State except Hawaii.

Other regions with below-average

growth

In the Great Lakes region, total personal income grew 8.1 percent , 0.4 percentage point below the U.S. average, from the third quarter of 1988 to the third quarter of 1989. In the Mideast region, personal income grew 8.4 percent. In both regions, weakness in durables and nondurables manufacturing payrolls dampened personal income growth. Weakness in motor vehicles production in Michigan adversely affected durables payrolls in the Great Lakes region.

In the Southwest, slow growth in payrolls in most major industries contributed to below-average personal income growth (8.2 percent). Growth in payrolls in private service-type industries was slower than in any other region.

In the Southeast, a substantial decline in rental income of persons led to below-average growth in personal income (8.3 percent). The decline in rental income reflected damage to structures caused by Hurricane Hugo in the third quarter of 1989. South Carolina - where most of the damage occurred - was the only State with a decline in personal income over the past year. If the effects of the damage caused by the hurricane were excluded, personal income would have increased 9.4 percent in South Carolina and 8.9 percent in the Southeast.
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Publication:Survey of Current Business
Date:Jan 1, 1990
Words:523
Previous Article:The business situation.
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