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September 24, 2020

CT income up 18% in 2Q amid pandemic assistance; growth rate ranks 49th nationally

By HBJ Staff

Connecticut wages grew at the second-slowest pace in the country during the second quarter as government pandemic assistance payments helped to temporarily inflate personal income in every U.S. state, according to the U.S. Bureau of Economic Analysis.

Personal income in the state grew at an annual rate of 18.3% in the second quarter, ranking Connecticut No. 49 nationally in growth vs. the first quarter. For the quarter ended June 30, Connecticut workers earned over $290.64 billion, up from $278.7 billion recorded in the first quarter, BEA said Thursday.

Wages rose 34.2% nationally during the second quarter, BEA said. That's significantly higher than the 4.1% increase in the first quarter.

That resulted, largely, because of major increases in personal transfer receipts, which more than offset decreases in earnings and in property income, BEA said. Transfer receipts include new government relief payments provided by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, in addition to benefits for veterans, retirement, disability insurance (Social Security), medical (Medicare and Medicaid) and income maintenance.

In total, transfer receipts nationally rose $2.5 trillion in the second quarter, after increasing $80.3 billion in the first quarter. State unemployment compensation also swelled by a $600 increase in weekly benefits provided by the CARES Act, among many other compensation programs, including a $1,200 payment to individuals.

Nationwide earnings, meanwhile, decreased 27.5% in the second quarter after rising 3.4% in the first quarter.

In Connecticut, net earnings plummeted 29% and transfer receipts increased 865.3%.

Wages in the state fell the most in the accommodation and food service (-3.28%), health care and social assistance (-2.52%), durable goods (-2.31%), state and local government (-1.96%), retail (-1.66), arts, entertainment, and recreation (-1.42) and other services (-1.39).

Among all 50 U.S. states, the percent change in income ranged from 76.3% in Massachusetts to 15.8% in Tennessee.

View BEA’s full report here

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