Source: US Bureau of Economic Analysis
State personal income decreased 10.0 percent at an annual rate in the third quarter of 2020, after increasing 35.8 percent in the second quarter, according to estimates released today by the Bureau of Economic Analysis (table 1). Personal income decreased in every state and the District of Columbia, ranging from –29.9 percent in West Virginia to –0.6 percent in Georgia.
Decreases in personal current transfer receipts and property income (dividends, interest, and rent) more than offset an increase in earnings (chart 1). Reduced government relief payments provided under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 were the leading contributor to the decrease in personal current transfer receipts.
Transfer receipts. Transfer receipts decreased $1.3 trillion for the nation in the third quarter of 2020, after increasing $2.4 trillion in the second quarter. The decrease in transfer receipts reflected decreases in state unemployment insurance compensation, and all other transfer receipts (chart 2). Transfer receipts decreased in every state and the District of Columbia, ranging from $2.1 billion in the District of Columbia to $122.4 billion in California (table 2).
The decrease in state unemployment compensation reflected a partial rebound in employment as workers returned to their jobs following the economic shutdown due to the COVID-19 pandemic, as well as the expiration of the temporary $600 increase in weekly federal government benefits provided by the CARES act. The decrease in all other transfers reflected a decrease in the number of $1,200 economic impact payments paid to individuals that started in the second quarter.
Coronavirus (COVID-19) Impact on the Third-Quarter 2020 State Personal Income
The 2020 Q3 estimates of state personal income were impacted by the response to the spread of COVID-19. Federal economic recovery payments slowed as pandemic-related assistance programs continued to wind down. The full economic effects of the COVID-19 pandemic cannot be quantified in the state personal income estimates because the impacts are generally embedded in source data and cannot be separately identified. For more information, see Effects of Selected Federal Pandemic Response Programs on Personal Income by State.
Property income. Property income decreased 4.0 percent for the nation in the third quarter of 2020, after decreasing 8.2 percent in the second quarter. Property income decreased in every state, ranging from –5.7 percent in Arkansas to –1.7 percent in Hawaii.
Earnings. For the nation, earnings increased 32.8 percent in the third quarter of 2020, after decreasing 25.8 percent in the second quarter (table 2). The increases reflected the gradual reopening of businesses following the partial economic shutdown due to the COVID-19 pandemic.
Earnings increased in 23 of the 24 industries for which BEA prepares quarterly estimates (table 4). Healthcare and social assistance, accommodations and food services, and retail trade were the leading contributors to the overall earnings increase. The percent change in earnings across all states ranged from 11.5 percent in Oklahoma to 55.3 percent in Nevada.
Next release: March 24, 2021 at 8:30 A.M. EDT
Personal Income by State, 4th Quarter and Year 2020 (Preliminary)