Idaho 2008 Quarterly Personal Income Declines for Second Time

Total personal income in Idaho fell 0.3 percent during the summer quarter, marking the second quarter in 2008 the state has seen income drop. Idaho’s third quarter decline reflects the absence of stimulus checks sent to Americans last spring by the federal government in an effort to stimulate the economy.

The U.S. Bureau of Economic Analysis estimates personal income during the July-September period totaled just under $49 billion, on an annualized basis. That compared to $49.1 billion during the April-June quarter.

Even without the effect of the federal stimulus program, net earnings in Idaho – the money paid workers and the profits taken by business proprietors and investors – were up an anemic 0.27 percent. The slight increase in net earnings was more than offset by a 3.4 percent reduction in transfer payments due to the absence of stimulus checks. Transfer payments typically include Social Security, pensions, unemployment benefits and similar payouts.  

The third quarter drop was less than the half percent decline posted in the first quarter, but it still made Idaho one of only three states to record quarter-to-quarter losses in 2008. Arkansas and Louisiana were the other two, and each posted larger percentage declines than Idaho.

Idaho’s third quarter loss compared to a fractional increase in personal income nationally as 21 of the 49 states also reported personal income declines for the third quarter. Idaho’s personal income change ranked 39th nationally.

The impact of the stimulus checks on Idaho was significantly greater than on most other states. Idaho reported a 0.6 percent decline in transfer payments – the equivalent of $276 million – from the second to third quarters. Only 16 others states saw larger percentage declines.

At the same time, the increase in net earnings of just 0.2 percent ranked Idaho 47th among the states. Only Utah, Nebraska, Arizona and Iowa had lower growth rates. While worker wages were up slightly for the summer quarter, proprietor earnings were down.

Income declines in agriculture, construction, manufacturing and transportation were offset by earnings increases in health care, business services, mining and state and local government, which typically boost services during economic declines. The other sectors of the economy were essentially flat.

Idaho’s personal income in 2007 increased 8.5 percent, two and a half percentage points more than the national increase to rank 8th among the states. Compared to summer 2007, Idaho’s third quarter 2008 personal income was up just 2.5 percent to rank 46th nationally ahead of only Louisiana, Connecticut, Arizona, Michigan and Florida.
 
A state-by-state personal income table follows.