WASHINGTON -- The growth of personal income in California far outpaced other states' in the second quarter as household earnings in the Los Angeles area rebounded following the January earthquake, the government reported yesterday.
"In California, personal income increased 3.9% in the second quarter after declining 1.6% in the first," said a U.S. Commerce Department report. "The rebound reflected the effects on personal income of the destruction caused by the earthquake and the relief efforts that resuited."
Had the earthquake not occurred, personal income in California would have grown 1% in the second quarter and 1.1% in the first, the department estimated.
For the entire nation, income grew 1.9% in the second quarter, up from 1.3% in the first three months of the year, the report noted.
The report showed that the Los Angeles earthquake had a sizable effect on the national averages. "If U.S. personal income is calculated without the adjustments for the earthquake's effects, income would have increased 1.5% in the second quarter and 1.6% in the first," the report said.
Consumer prices rose by 0.7% during the second quarter, the report noted. 'In all except four farm states -- Arkansas, Minnesota, Iowa, and South Dakota -- increases in personal income exceeded the increase in U.S. prices," the report said.
Personal income growth in 10 states surpassed the national average of a 1.9% gain in the second quarter, the report said. California was well ahead of the pack, followed by Nevada, Delaware, Nebraska, and Florida, respectively.
"Most of these states had above-average increases in payrolls in both durables
and nondurables manufacturing and in consauction," the report said. "All of these states except Nebraska had average or above-average increases in payrolls in private service-type industries."
On the other end of the spectrum, 11 states experienced personal income growth less than two-thirds the 1.9% national average during the second quarter, the report said.
South Dakota was the only state to have an actual decline in household income, with a 0.5% drop, in the second quarter. The state was particularly hard hit by a decline in federal farm subsidy payments.
Arkansas, Minnesota, and Iowa also suffered from falling farm subsidies. "Arkansas had a decline in federal subsidy payments to rice farmers, and Minnesota, Iowa, and South Dakota had declines in federal payments to farmers for relief from the effects of the 1993 Midwest floods," the report said.
Growth in payrolls for both durable and nondurable goods manufacturing was "weak" in Minnesota and Iowa as well, the report noted.
In addition, manufacturing, construction, and government payrolls were noted as either declining or growing sluggishly in South Carolina, Vermont, West Virginia, Hawaii, Montana, New Hampshire, Ohio, and Alaska.
