U.S. personal income grows

By Gertha Coffee

The Atlanta Journal-Constitution

Personal income in Georgia stayed flat in the second quarter of the year, even as government spending pushed the nation as a whole to a small increase -- the country's first in a year.

U.S. personal income grew 0.2 percent in the second quarter of 2009, according to quarterly numbers released Friday by the U.S. Bureau of Economic Analysis. In the first quarter, U.S. personal income fell 2.3 percent.

But the difference between Georgia's  flat growth and the nation's slight increase is relatively insignificant, said Georgia economist Roger Tutterow.

"While the personal income estimate is up, it is not because of gains in the labor market," said Tutterow, professor of economics at Mercer University. "The change is because of transfer receipts, which is largely income coming from the government. "

In every state but one, the report said, personal income increases can be attributed to growth in transfer receipts -- including Social Security benefits, unemployment compensation,  food stamps, Medicare, Medicaid and stimulus money.

The other components of personal income -- net earnings and property income -- declined in every state except North Dakota, the report said, where the farm sector accounted for a large portion of growth.

"What drives net earnings is people working and the type of compensation they're getting," said Tutterow.

Second quarter transfer receipts were boosted by the American Recovery and Re-investment Act (ARRA) of 2009, the report said, and because of rising unemployment benefits as the nation's jobless ranks continue to swell.

ARRA payments for food stamps, SSI and Old Age, Survivors and Disability Insurance were $60 billion in the second quarter, the report said, while state unemployment benefits increased $44 billion and all other transfers increased $49 billion.