The State of America’s Private Sector XXII: May, 2011

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released their monthly personal income data for April 2011 (pdf).

The chart below shows the private sector share of personal income from January 1959 to May 2011.  The private sector share of personal income was virtually unchanged in May to 70.56 percent from 70.55 percent in April.  Not much of  story here this time, except that the private sector is not yet on a path to reclaim its lost ground.

Note: “Supplements to Wages and Salaries” (benefits) in the BEA data are not broken down into “private” sector” versus “government” components. I used the ratio of private wages and salaries to total wages and salaries in order to disaggregate supplements.

Chart of Private Sector Share of Personal Income for May 2011

The State of America’s Private Sector XXI: First Quarter 2011

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released new personal income data for the first quarter of 2011 by state (pdf) and revisions for the past couple of years.  As shown in Chart 1, The U.S. private sector share of personal income for the first quarter of 2011 was at  69.3 percent.  While this is the highest point since the second quarter of 2009, the private sector has essentially been moving sideways.  With the economic signs of a double-dip recession growing by the day, even this slight uptick in the private sector may be short-lived.

Chart of Private Sector Share of Personal Income for 1st Quarter 2011

Chart 2 shows the major culprit behind this crowding-out of the private sector since the beginning of the “Great Recession”–the Orwellian American Recovery and Reinvestment Act (ARRA).  In the first quarter of 2011, the ARRA pumped $45.5 billion into the U.S. economy via personal current transfer receipts (pdf).  This is down from the peak spending ($103.1 billion) under ARRA in the first quarter of 2010.  As ARRA spending continues to wind-down, this will help the U.S. private sector rebound from its all-time lows though it puts a drag on overall personal income growth.

Chart of ARRA Contributions to Personal Income for 1st Quarter 2011

The State of America’s Private Sector XX: April, 2011

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released their monthly personal income data for April 2011 (pdf).

The chart below shows the private sector share of personal income from January 1959 to April 2011.  The private sector share of personal income increased in April to 70.52 percent from 70.46 percent in March.

The March jump in“government unemployment insurance benefits” (GUIB) fell back in April.  So like the previous jump in GUIB in August, 2010, perhaps the March jump was also a one-time blip.

Interestingly, I just noticed what appears to be a growing divergence in two important line-items within personal income.  I need to do more research into what I think means . . . but if my hunch is correct, then you will want to stay tuned.  I’ll try to work on it over the holiday weekend.

Note: “Supplements to Wages and Salaries” (benefits) in the BEA data are not broken down into “private” sector” versus “government” components. I used the ratio of private wages and salaries to total wages and salaries in order to disaggregate supplements.

Private Sector Sector Share of Personal Income for April 2011

The State of America’s Private Sector XXI: March 2011

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released their monthly personal income data for March 2011 (pdf).

The chart below shows the private sector share of personal income from January 1959 to March 2011.  The data for March looks like it might be pointing to trouble.  First, after nearly a year of continuous growth, the private sector share of personal income fell in March to 70.44 percent from 70.49 percent in February.

That by itself would necessarily be cause for alarm since it could just be a one month blip.  However, looking more closely at the data reveals a disturbing turnaround in “government unemployment insurance benefits” (GUIB) in March.  The highpoint for GUIB was in March 2010 when it was at 156.8 billion and has since fallen from that high to 112.8 billion in February 2011.

In March it climbed to 118.1 billion.  Between January and February, GUIB fell by 10 billion, but for March went up by $5.3 billion–that is a $15.3 swing which significantly influenced the decline in the private sector share.  To highlight the importance of GUIB, in August, 2010 the private sector share also fell and GUIB climbed from $123.2 billion in July, 2010 to $150.5 billion in August, 2010.  But that was just a one month blip and a larger one at that.

The question now is–will GUIB continue to increase or was this too merely a one month blip that will correct itself in April?  Given that gas prices are now at $4 a gallon ($3.95 in my neck of the woods), I’m thinking that this is more than just a blip.  Anyone else have any insights on this?

Note: “Supplements to Wages and Salaries” (benefits) in the BEA data are not broken down into “private” sector” versus “government” components. I used the ratio of private wages and salaries to total wages and salaries in order to disaggregate supplements.

Private Sector Monthly March 2011