10.19.2009 Policy Points

Personal Income in North Carolina

Preliminary data from the Bureau of Economic Analysis show that total personal income in North Carolina grew at a seasonally adjusted, quarterly rate of  0.4 percent between the first and second quarters of 2009. This was the first positive quarterly change recorded in North Carolina since early 2008.

All of the increase was attributable to government transfer payments, primarily payments associated with the American Recovery and Reinvestment Act. Transfer payments grew by 8.3 percent between the first and second quarters of the year. Altogether, government transfer payments added 1.6 percentage points to personal income growth.

Private sources of income, meanwhile, were negative. Net earnings fell and reduced total personal income by 0.75 percentage points. Similarly, dividend/ investment income fell and subtracted 0.4 percentage points from total personal income.

Although North Carolina was one of only a few states to post positive personal income growth, its performance was a middling one by any objective measure. Private income sources continued to decline and are much lower than they were one year ago. Absent government transfer payments, personal income would be even lower than it is.

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