Yesterday the Bureau of Economic Analysis released its figures for personal income growth in each state for the third quarter. Personal income did not increase at all in the third quarter in Alabama. This lack of income growth is disappointing after the second quarter growth of 1.5 percent.
But the news is not all bad. Although the overall personal income did not rise, the actual earned income rose by 0.3 percent. This was offset by a decrease in the income from goevernment transfer payments, such as welfare, unemployment insurance, and stimulus payments. The composition of Alabama's income growth is improving, which is a good sign for the economy.
The U.S. personal income growth also contained more net earnings in the third quarter. While income growth in the second quarter was composed almost entirely of government transfer payments, income growth in the third quarter contained more net earnings. This positive change is due in part to the decline in the number of claims for jobless benefits. Last month's unemployment insurance claims are at a 12-month low. So although the unemployment rate remains high, the tide may be turning.
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