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US State Personal Income Fell 21.8% on Reduced Direct Economic Impact Payments

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State personal income plunged 21.8% in the second quarter of 2021 after rising 56.9% in the first quarter.

Source: US Department of Commerce

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The decline in transfer receipts was the main contributor to the decrease in personal income in all 50 states and the District of Columbia.

West Virginia’s personal income fell the most, 34%, and Washington DC enjoyed a slight decrease in personal income for the quarter ending July 30 at 10.1%.

In Q2 of 2021, transfer receipts declined $1.7 trillion, accounting for over $1.3 trillion declines in personal income, reflecting a reduction of indirect economic impact payments provided under the American Rescue Plan Act.

California recorded the most decrease in transfer receipts, -$185.6 billion, while Washington DC reported the lowest decrease, -$2.5 billion.

The 2021 second-quarter estimates of state personal income indicated the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic.

The US overall net earnings increased by 10.7%. Dividends, interests, and rent increased by 4.4%, while government assistance fell 72.6%.

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