States experienced jump in personal income in 2nd quarter due to government support

Personal income levels throughout the country received a boost in the second quarter of 2020 through assistance programs from the federal government designed to combat the economic difficulties brought on by the COVID-19 pandemic. In their recently published report, Pew Charitable Trusts explains that “the surge in federal assistance more than offset record losses in earnings, which counts wages from work and extra compensation such as employer-sponsored health benefits, as well as business profits.” Earnings reflected the largest losses on record, falling by about $860 billion from the prior quarter and $670 billion from a year ago.

With the federal aid, total personal income within the United States saw a growth of 9.7 percent. However if the government-provided funding were removed from the equation, Pew found that personal income across the nation had fallen by 4.8 percent, noting that “total personal income would have dropped by more than 5 percent in nearly half of states.”

The Pew team also explores how the percentage of total personal income growth varied between states; Connecticut (5.1 percent), Tennessee (5.6 percent), and Alaska (6.6 percent) experienced the smallest increases, while states on the high end included West Virginia (14.4 percent), New Jersey (15.2 percent), and Massachusetts (16.6 percent).

Pew does note that results for the second quarter of 2020 are based on estimates and subject to revision. The entire report, including personal income growth data for all 50 states, can be found here.