Personal income in Georgia rises 28% due to unemployment insurance and economic impact payments

Source: Bureau of Economic Analysis 

Personal income for Georgia’s residents rose sharply in the 2^nd quarter of 2020 thanks to large payouts by the state unemployment fund and economic impact payments funded by the federal government. 

Wages declined by $16.8 billion over the three-month period.

Over the quarter, personal income increased by 28.5% at an annual rate in the 2^nd quarter of 2020, below the national average, which rose by 34.2%.

Total personal income in Georgia equaled $558.88 billion in the 2^nd quarter compared to $524.91 billion in the 1^st quarter of the year and $510.46 billion in the 2^nd quarter of 2019.  

While nonfarm income rose by $35.8 billion, farm income declined by $1.8 billion over the quarter.

The state’s personal income per capita rose to $52,184.

Changes in personal income components

Overall, personal income in Georgia rose by $33.9 billion in the 2^nd quarter.

Net earnings of workers by place of residence dropped by $20.7 billion, and income from dividends, interest, and rent receipts declined by $2.1 billion.

These losses were offset by $56.8 billion increases in transfer receipts. The largest contributors to the rise in transfer receipts were economic impact payments financed by the federal government ($34 billion) and state unemployment insurance benefits ($14.7 billion).

Transfer payments include Social Security, Medicare, Medicaid, state unemployment insurance, as well as boosts due to benefits provided by the CARES Act, expansion of eligibility of workers, not previously covered by state unemployment insurance, economic impact payments to individuals, and provider relief funds for nonprofit institutions, such as hospitals and health care providers.

More detailed information is available here.

Georgia personal income up 3.1% in the 1st quarter of 2020; nation rises by 2.3%

Personal income growth, 1st quarter 2020

Personal income in Georgia rose 3.1% at an annual rate in the first quarter of 2020 according to new information released by the U.S. Bureau of Economic Analysis.

The increase equaled the percentage gain in the 4th quarter of 2019 but fell short of the 6.1% gain recorded by the state in the 1st quarter of 2019.

For the U.S., personal income increased 2.3% in the first quarter of 2020, a deceleration from the 3.6% increase recorded in the 4th quarter of 2019.

For the 1st quarter of 2020, personal income in the state totaled $522.194 billion.

Personal income is the income received by, or on behalf of, all persons from all sources: from participation as laborers in production, from owning a home or business, from the ownership of financial assets, and from government and business in the form of transfers. It includes income from domestic sources as well as the rest of world. It does not include realized or unrealized capital gains or losses.

The report contains information for the months of January, February, and March and so comes before the shelter-in-place order given by Governor Kemp, which was effective on April 3. With the order, the state’s economy entered into a much slower period that will be reflected when information for the 2nd quarter is released later this year.

Types of income

BEA classifies personal income by components of net earnings; dividends, interest and rent; and transfer receipts.

Net earnings by place of residence is earnings by place of work less contributions for government social insurance, plus an adjustment to convert earnings by place of work to a place-of-residence basis.

Transfer receipts include items such as social security benefits, state unemployment benefits, and Medicare and Medicaid payments.

Over the first quarter of the year, of the $3.962 billion increase in personal income for the state, net earnings increased by $845 million; dividends, interest and rent added $711 million; and transfer receipts climbed by $2.407 billion.

In Georgia, net earnings contributed 0.7 percentage points towards the state’s 3.1% increase in the first quarter of the year with dividends, interest, and rent accounting for 0.5 percentage points and transfer payments accounting for 1.9 percentage points.

For the U.S., net earnings accounted for 0.2 percentage points of the nation’s 2.3% increase while dividends, interest and rent accounted for 0.5 percentage points, and transfer payments contributing 1.7 percentage points. 

Differences between the sum of the components and the totals shown are due to rounding of data.

Increases by industry

For the state, earnings grew fastest in the finance and insurance industry, up by $616 million followed by construction, which recorded increases of $369 million in the first quarter.

Earnings in the accommodation and food services industry declined by $800 million in the first three months of the year.

The largest percentage increases in earnings occurred in finance and insurance (+0.48%), construction (0.28%), and state and local government (0.27%).

The largest percentage declines were reported in accommodation and food services (-0.62%) and administrative and waste management services (-0.14%).

State of Georgia personal income increases, individual income tax revenues decline: All driven by changes in the Atlanta metro area

Personal income in the State of Georgia grew by 3.8% in the third quarter of 2019, the same growth rate as the nation.

State personal income totaled $515.06 billion compared to $510.258 billion in the second quarter of the year placing the state as ranking 19th in its personal income growth rate.

Since the third quarter of 2018, the state’s personal income has risen by more than 4.3%.

The increase occurs even as Georgia reports lower Individual Income Tax collections over the quarter.

In July, Individual Income Tax collections came in $72.5 million above the amount collected in July 2018. In August and September, Individual Income Tax collections came in below amounts for the previous year by -$58.3 million, and -$27.4 million respectively. 

Combined, Individual Income Tax collections decreased by -$14.2 million compared to the same period last year.

GDP growth driven by the Atlanta metro area

Newly released information from the U.S. Bureau of Economic Analysis (BEA) demonstrates how the state’s development is being driven by the Atlanta metro area.

Georgia is highly dependent on the Atlanta metro area for the state’s prosperity and suffers when growth in the Atlanta area slows.

In 2018, the Atlanta metro area’s real GDP (a measurement of all goods and services adjusted for changes in prices, either inflation or deflation) rose by 2.5% compared to 2.4% for the State of Georgia and 2.9% for the nation.

The previous year, the Atlanta metro area’s real GDP rose by 4.1% compared to the state’s 3.7% and the nation’s 2.4% growth rate.

Five-year growth rates

More evidence for the outsized role that the Atlanta metro area plays in the state’s growth comes from recently released county GDP numbers.

The Atlanta area’s real GDP rose by 21.6% in the most recent five-year period compared to a rise of 17.35% for the state.

Five of the six counties showing the greatest dollar growth in GDP are located in the Atlanta area, including Fulton, Cobb, Gwinnett, DeKalb, and Clayton counties, each with real GDP growth greater than $2 billion over the past five years.

The only other county in Georgia with GDP growth of more than $2 billion was Chatham County, part of the Savannah metro area.

Fulton County was responsible for the largest GDP in the state, at $152.3 billion and recorded a 24.42% real GDP growth rate since 2013.

Georgia has 159 counties, the most of any state east of the Mississippi River, and Fulton County’s GDP exceeds the combined GDP of 144 of those 159 counties.