Given that the first quarter of this year included two rounds of stimulus checks totaling $2,000 for many Americans, it should come as no surprise that personal income rose sharply in the quarter.
In Wisconsin, personal income increased at an annualized rate of 66.5% compared to the fourth quarter, reaching $369 billion as a seasonally adjusted annual rate, according to new data from the U.S. Bureau of Economic Analysis.
By comparison, personal income in the state was nearly $339 billion in the second quarter of 2020, which also included stimulus payments. Personal income totaled $324 billion in 2020 and $310 billion in 2019.
Most of the increase was driven by growth in transfer receipts, a category that includes Social Security, Medicare and Medicaid benefits, unemployment compensation and other government payments. For the first quarter, transfer payments totaled nearly $103 billion on an annualized basis, up from $61 billion in the fourth quarter.
While Social Security, Medicare and Medicaid benefits remained largely on par with their pre-pandemic levels, unemployment and other payments were higher.
The unemployment benefits paid in the quarter totaled $4.1 billion on an annualized basis, up from $1.9 billion in the fourth quarter. That figure is down from $10.3 billion and $6.1 billion in the second and third quarter of 2020. However, it is still well above 2019’s average of around $384 million.
The other payments category hit a new high in the quarter at $50.6 billion on an annualized basis, up from around $12.7 billion in the fourth quarter. The previous peak came at almost $35 billion in the second quarter of 2020. In 2019, the category typically covered slightly less than $10 billion in payments.
Wisconsin did see some growth in net earnings, which came in at $207 billion on an annualized basis, up 6.4% from the fourth quarter. The increase ranked 25th in the country and was ahead of the U.S. growth rate of 6.1%.
Three states saw earnings growth top 10% with Texas leading the way at 11.1%, followed by Michigan, 10.7% and Tennessee at 10.5%
The BEA noted the earnings in Michigan, Illinois, Indiana, Kansas Kentucky, Missouri, Ohio, Tennessee and Texas were boosted by profit sharing payments by automakers to workers represented by the UAW.
On the flip side, earnings in South Dakota, Iowa, Montana, Nebraska , North Dakota and Wyoming decreased because of lower payments to farmers from the Coronavirus Food Assistance Program.
In Wisconsin, nearly all sectors saw total earnings grow in the first quarter, led by accommodation and food service, up 39.5% on an annualized basis. Durable goods manufacturing also grew earnings 21.4%. Utilities was the only sector to see a decrease, down 1.6%.