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State personal income, first quarter, 1987.

State Personal Income, First Quarter 1987

PERSONAL income increased in 44 States and declined in 6 States in the first quarter of 1987. Swings in farm income dominated the changes in personal income in States with large increases or declines. Changes in Federal farm subsidy payments, in turn, were major causes for changes in farm income. The largest first-quarter increases in personal income were in Iowa and Nebraska, where farm income was boosted by advance subsidy payments on the 1987 corn crop, and in Arkansas and Mississippi, where farm income was boosted by payments on the 1986 cotton and rice crops. Personal income declined in North Dakota, Montana, Idaho, Kansas, and Oklahoma, where farm income fell following large fourth-quarter payments on the 1986 wheat crop.

The effects of subsidy payments can vary substantially from State to State and from quarter to quarter. Crop production usually is concentrated in a few States, each eligible crop is under a different subsidy program, and the subsidies are not paid out evenly over the year. In Iowa, for example, due in large part to the quarterly pattern of payments on the corn crop, personal income including farm income fluctuated substantially more in recent quarters than personal income excluding farm income.

Nonfarm personal income

Because farm income is subject to erratic changes, as indicated above, it is often preferable to use nonfarm personal income rather than total personal income to track current economic developments in States. Nonfarm personal income for the Nation increased 1.5 percent in the first quarter.

States with the largest percentage increases in nonfarm personal income were: Delaware, 2.9 percent; Nevada, 2.5 percent; Vermont, 2.5 percent; Tennessee, 2.4 percent; Maine, 2.3 percent; Iowa, 2.2 percent; and New Hampshire, 2.1 percent. In Delaware and Iowa, large increases in durables manufacturing payrolls contributed to the nonfarm income gains. The manufacturing payroll increase in Delaware --the largest in the Nation--reflected increased production of small and mid-sized automobiles, and the payroll increase in Iowa--the second largest in the Nation--reflected the ending of a strike against a major farm equipment manufacturer.

In Vermont, Tennessee, and Maine, large increases in construction payrolls contributed to the nonfarm income gains. The construction payroll increases in Vermont and Maine--the two largest in the Nation--reflected strong demand for residential structures, and the increase in Tennessee reflected strong demand for commercial and industrial structures. In Nevada, large payroll increases in all major private service-type industries contributed to the nonfarm income gain, and in New Hampshire, a large increase in retail trade payrolls was the major source of increase.

Alaska was the only State in which nonfarm personal income declined. States with the smallest percentage increases were: Wyoming, 0.3 percent; Oklahoma, 0.5 percent; Louisiana and Utah, each 0.6 percent; Nebraska and New Mexico, each 0.9 percent; and Kansas, Missouri, and Texas, each 1.0 percent. Despite a first-quarter turnaround in energy prices, continuing weakness in oil exploration and production adversely affected nonfarm income in the oil-producing States of Alaska, Wyoming, Oklahoma, Louisiana, New Mexico, and Texas. In Alaska, in addition, reduced transfer payments to persons, reflecting the completion of fiscal year 1987 dividend payments from the Alaska Permanent Fund, contributed to the decline. In Nebraska, Kansas, and Missouri, continuing weakness in private service-type payrolls as a result of weak farm prices and production adversely affected nonfarm income. In Nebraska, in addition, a strike by food processing workers led to a decline in nondurables manufacturing payrolls.

Quarterly estimates of State personal income appear at the end of this article. Quarterly estimates of State nonfarm personal income are available from the Regional Economic Information System (BE-55), Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; phone (202) 523-0966. The quarterly estimates do not reflect the July 1987 revisions to the national income and product accounts; those revisions will be incorporated in the quarterly estimates of State personal income that will be published in the October 1987 SURVEY OF CURRENT BUSINESS. The revision to farm income is likely to affect the State income changes discussed in this article.

State Quarterly Personal Income, 1969:I-1987:I

Table: [Percent change from preceding quarter at quarterly rate]

Table: 1.--Total Personal Income for States and Regions
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Author:DePass, Rudolph E.
Publication:Survey of Current Business
Date:Jul 1, 1987
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