The U.S. Bureau of Economic Analysis released its first estimate of State quarterly personal income for the fourth quarter of 2002 and State annual and per capita personal income for 2002 in April. Some of the major highlights include:
In 2002, Connecticut per capita personal income was $42,706. Though it maintained its number one position as the state with the highest per capita income, New Jersey and Massachusetts were close behind.
The State's population stood at 3.460 million in 2002, up 25,901, or 0.75 percent, from a year ago. Connecticut grew faster than Massachusetts, New York, and New England, but slower than Rhode Island and the U.S
Connecticut quarterly personal income (QPI) grew 3.25 percent between 2001:Q4 and 2002:Q4. Reflecting the recession, transfer payments grew 8.32 percent, a rate more than twice the growth of total QPI. However, also over this period, proprietor's income grew 6.47 percent, or double the rate of total QPI
The following presents Connecticut's quarterly personal income (QPI) for the third and fourth quarters of 2002, released by the U.S. Bureau of Economic Analysis (BEA), and the performance of its major residence-based components. Also a brief sketch of recent history and the forecast for QPI to the fourth quarter of 2003, and historical annual personal income and per capita personal income will be discussed.
Fourth Quarter 2002
Connecticut QPI for fourth quarter 2002 (2002:Q4) was $149.233 billion, up $0.978 billion from 2002:Q3. This represents a 0.66 percent increase on a quarter-to-quarter (QTQ) basis, and a 3.25 percent growth rate on a year-to-year (YTY) basis. The 2002:Q3 preliminary estimate, released in January 2003, was $147.969 billion. The second estimate for 2002:Q3, released in April 2003, was $148.255 billion. This represented a $286 million upward revision. The upward revision reflects the incorporation of newly available source data from unemployment insurance tax data on wage and salary disbursements. The April revisions go back fifteen quarters to 1999:Q1.
Performance of Major Components
The Connecticut QPI grew 3.25 percent between 2001:Q4 and 2002:Q4. Reflecting the recession, transfer payments grew 8.32 percent, a rate more than twice the growth of total QPI. However, also over this period, proprietor's income grew 6.47 percent, or double the rate of total QPI. Nevertheless, the two largest sources for Connecticut, labor services income and property income grew more slowly than total QPI. Net labor income (wages and salaries plus other labor income, minus social insurance contributions, plus an adjustment for residency), grew 2.39 percent. Dividends, interest and rent (DIR), which are property-based income sources, grew at an anemic 1.62 percent over the year. A large part of the slow growth in DIR is attributable to record low interest rates.
Recent History and Forecast
The effects of the recession are apparent in the downward slope of the trend line for QPI up to 2001:Q4 in Graph 2. It recovered in 2002:Q1 and grew at a decelerating rate up to 2002:Q4, the latest available data point. On a YTY basis (Graph 3), the growth rate in QPI decelerated rapidly after 2000:Q4, and then turned negative in 2001:Q4. The YTY growth rate began recovering in 2002:Q2, and turned positive in 2002:Q3. In 2002:Q4, QPI grew 3.25 percent, on a YTY basis.
The Connecticut Department of Labor forecasts that QPI will decelerate on a QTQ basis from 0.66 percent in 2002:Q4 to 0.42 percent in 2003:Q1. Growth is expected to pick up slightly to 0.57 percent in 2003:Q2. Growth is projected to hold steady in 2003:Q3, and then accelerate to 0.93 percent in 2003:Q4. On a YTY basis, QPI growth is expected to decline from the 3.25 percent rate in 2002:Q4 to 2.47 percent in 2003:Q1. The YTY growth rate is expected to further decelerate over 2003:Q2 and 2003:Q3, and then return to a 2.47 percent rate in 2003:Q4.
Annual and Per Capita Personal Income
Connecticut's total annual personal income (PI) was $147.784 billion for 2002. This was up $2.236 billion, or 1.54 percent, from 2001. Connecticut per capita PI was $42,706 in 2002, up from $42,377 in 2001, growing by $329, or 0.78 percent.
Rhode Island had the strongest growth in total annual PI (+4.50 percent) and in per capita PI (+3.51 percent) in 2002. New York had the most anemic income growth in 2002. PI only grew by 0.84 percent, and per capita PI grew by only half that rate at 0.46 percent. Connecticut had the third slowest growth in income (+1.54 percent), ahead of Massachusetts and New York in 2002. However, Connecticut's per capita PI growth was the second slowest at 0.78 percent. Nevertheless, Connecticut still maintained its number one position as the state with the highest per capita income in the U.S. with $42,706. New Jersey moved up from number three to number two, with a per capita income of $39,453, and Massachusetts slipped from second to third, with a per capita income of $39,244.
For the entire 32-year period, Connecticut per capita PI has been consistently above New England's per capita income, and New England has been consistently above U.S. per capita income. In fact, in 2002, Connecticut's per capita income was 38 percent above that of the U.S.
The U.S. Economic Development Administration (EDA) has named Connecticut's strategy for economic competitiveness among the top programs in the 2003 Excellence in Economic Development Awards. Known as the Industry Cluster Initiative and overseen by the Department of Economic and Community Development (DECD), the strategy was recognized in the category of Excellence in Regional Competitiveness for its enhancement of the region's competitiveness and support of its long-term development.
EDA's annual award program recognizes innovative economic development strategies of national significance and highlights the best practices from throughout the U.S. The selection criteria required the nomination to: be market-based; be proactive in nature and scope; look beyond the immediate economic horizon, anticipate economic changes and diversify the local and regional economy; maximize the attraction of private-sector investments; demonstrate a high rate of sustained success; result in an environment where higher skill and higher wage jobs were created; and maximize return on taxpayer investment.
Developed by the Governor's Council on Economic Competitiveness & Technology, the Industry Cluster Initiative is a public/private partnership - driven by industry and the private sector - to identify, develop, implement and nurture cluster activity in industries and markets critical to the State's economic growth.
Connecticut was recognized as a finalist during EDA's national conference, May 6-9 in Washington, D.C.
Commissioner James F. Abromaitis of the Connecticut Department of Economic and Community Development today announced that Connecticut communities authorized 856 new housing units in April 2003, a 19.3 percent decrease compared to April of 2002 when 1,061 units were authorized.
The Department further indicated that the 856 units permitted in April 2003 represent a 42.7 percent increase from the 600 units permitted in March 2003. The year-to-date permits are down 16.9 percent, from 3,057 through April 2002, to 2,539 through April 2003.
Compared to last month's permit data, the Hartford, New Haven and New London Labor Market Areas showed the highest gains of 82 units, 45 units and 42 units respectively. For year-to-date, the Danielson Labor Market Area (LMA) is the only LMA to show an increase in permit authorization. Avon led all Connecticut communities with 37 new units, followed by Wallingford with 22 and Bristol with 21. From a county perspective, Hartford County had the smallest year-to-date loss of 4.0 percent.
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