New Hampshire’s Private Sector . . . 2nd Quarter, 2011

Last week the U.S. Department of Commerce’s Bureau of Economic Analysis released new personal income data for the second quarter of 2011 by state (pdf) and revisions for the past couple of years. As shown in Chart 1, New Hampshire’s private sector share of personal income for the second quarter of 2011 was at 76.1 percent–or 9.9 percent larger than the national average.

Note that the private sector is significantly higher than last reported for the first quarter, 2011. The reason is due to the Orwellian American Recovery and Reinvestment Act (ARRA). According to new BEA revisions, “net” ARRA payments are lower than reported previously because “some ARRA funding, such as for Medicaid, replaced state funding and had no net effect on personal current transfer receipts.” As a result, the rebound in the private sector is better than previously reported.

As such, Chart 2 shows that, in the second quarter of 2011, the modified ARRA calculations show that $99 million was pumped into New Hampshire’s economy via personal current transfer receipts (pdf).  This is down from the peak spending ($303 million) under ARRA in the second quarter of 2009.  As ARRA spending continues to wind-down, this will continue to help New Hampshire’s private sector rebound from its all-time lows though it puts a drag on overall personal income growth.

New Hampshire’s Private Sector . . . 1st 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, New Hampshire’s private sector share of personal income for the first quarter of 2011 was at  75.7 percent–or 9.3 percent larger than the national average.  While this is the highest point since the third quarter of 2009, the private sector has essentially been moving sideways.

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 $103 million into New Hampshire’s economy via personal current transfer receipts (pdf).  This is down from the peak spending ($345 million) under ARRA in the second quarter of 2009.  As ARRA spending continues to wind-down, this will help New Hampshire’s private sector rebound from its all-time lows though it puts a drag on overall personal income growth.

New Hampshire’s Private Sector in 2010

Last week the U.S. Department of Commerce’s Bureau of Economic Analysis released their preliminary 2010 personal income data (pdf) (which includes revisions to previous years).

The chart below shows the private sector share of personal income since 1929 (the first year of available data) to 2010 (the last year of available data).  The opposite of the private sector is the public sector which is defined as all government compensation paid to employees (military and civilian) plus all personal current transfer receipts (Social Security, Medicare, Medicaid, Welfare, etc.).

As the chart clearly shows, the private sector has been steadily crowded-out by the public sector.  Nationally, the private sector has plummeted 24 percent to 68.7 percent of personal income in 2010 from 92.7 percent in 1929.  More troubling, 2010 is the lowest private sector share in history after dropping another 0.6 percentage points from 2009.  How low will it go?

However, contrary to the national average, New Hampshire’s private sector is faring fairly well . . . at least given the circumstances.  In 2010, New Hampshire has the largest private sector in the country (having surpassed Connecticut back in 2008).  Additionally, the decline in New Hampshire’s private sector leveled off in 2010 while it continued to fall nationally.  Now if New Hampshire can only get right-to-work enacted, then maybe we can get the private sector up back to over 80 percent 🙂