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June 22, 2021

Feds: CT lags in state personal income growth

By Zachary Vasile

Connecticut saw one of the weaker rebounds in state personal income growth during the first quarter of 2021, registering a 42% upswing compared to more robust recoveries in neighboring states and on the national level.

According to data released Tuesday by the Bureau of Economic Analysis, a unit of the U.S. Department of Commerce, Connecticut lagged well behind the U.S. average growth rate of 59.7% for the first three months of the year.

The figures look particularly dramatic because they are being measured against the first quarter of 2020 — when the nation’s economy went into lockdown due to the COVID-19 pandemic — and because of ongoing federal stimulus and unemployment compensation payments, which have allowed many Americans to save at the highest rate seen since the early 1980s.

Government assistance, which the BEA refers to as “transfer receipts,” increased $2.3 trillion for the first quarter of 2021, accounting for nearly the entire bump in personal income.

For the U.S. as a whole, individual earnings rose 6.1% after climbing 11.5% in the fourth quarter of last year.

Connecticut’s relatively modest increase in state personal income growth could be attributable to the gradual reopening of the state’s service sector, which had not come into full effect in the period analyzed by government researchers. The prevalence of white collar office jobs — and their work-from-home durability during the pandemic — could also mean that the state had less ground to make up to begin with.

New York (51.9%), Massachusetts (44.7%), Rhode Island (64.9%), Vermont (68.5%), New Hampshire (52.9%) and Maine (74.7%) all outperformed Connecticut, as did most of the South, Midwest and West.

Mississippi saw the greatest rebound in state personal income during the first quarter, registering an 89.3 percent increase.
 

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