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Archive for the ‘Private Sector’ Category

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

Tuesday, September 27th, 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.

Chart Showing NH Private Sector 2nd Quarter 2011

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.

Chart Showing NH ARRA 2nd Quarter 2011

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New Hampshire’s Private Sector . . . 1st Quarter, 2011

Wednesday, June 22nd, 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 of New Hampshire's Private Sector Share of Personal Income 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 $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.

Chart of New Hampshire ARRA 1st Quarter 2011

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New Hampshire’s Private Sector in 2010

Saturday, March 26th, 2011

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 :-)

New Hampshire Private Sector as a Percent of Personal Income 2010

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New Hampshire’s Private Sector . . . 3rd Quarter, 2010

Friday, December 17th, 2010

Today the U.S. Department of Commerce’s Bureau of Economic Analysis released new personal income data for the third quarter of 2010.  As shown in Chart 1, New Hampshire’s private sector share of personal income for the third quarter of 2010 tied the all-time low at 75.3 percent–the low was first set in the first quarter of 2010.

NH Private Sector 3rd Quarter 2010

Chart 2 shows the major culprit behind this crowding-out of the private sector–the Orwellian American Recovery and Reinvestment Act.  In the third quarter of 2010, the ARRA pumped $140 million into New Hampshire’s economy via personal current transfer receipts.  This is down from the peak spending ($345 3illion) under ARRA in the second quarter of 2009.  As ARRA spending continues to wind-down, New Hampshire’s private sector should rebound from its all-time lows.

NH American Recovery and Reinvestment Act 3rd Quarter 2010

However, it remains an open question as to how much of the private sector will be permanently lost.  As I blogged recently elsewhere, it is very likely that the private sector will continue to shrink.

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Per Capita versus Per Household Personal Income III

Wednesday, November 17th, 2010

In my previous blog, I showed how per capita and per household income varied between Maine and New Hampshire.  However, some folks may dismiss this as one special case where per household income makes a difference to the analysis that a larger private sector share of personal income means greater economic prosperity in the long-run.

So, the charts below show a scatter-plot of the relationship between the private sector and income under the per capita metric (chart 1) and per household metric (chart 2) for the lower 48 states.  In both charts, Alaska and Hawaii are excluded from the observations.

The first thing to note is that the r-squared is higher under the per household metric (0.52) versus (0.46). The r-squared measures how closely the observations conform to the predicted line as measured in the equation shown.  Even just eye-balling the chart you can see that in chart 2 the observations are more tightly clustered.  And Utah, the state that started this saga, has clearly moved from an outlier in chart 1 to middle-of-the-pack in chart 2.

Secondly, the correlation is steeper under the per household metric which means an even greater increase/decrease in income with a bigger/smaller private sector.  On average, a 1 percentage point increase/decrease in the size of the private sector yields an increase/decrease in household income of $2,617.  That’s a nice chunk of change.

Private Sector Share of Personal Income Correlated with Per Capita Personal Income by State for 2009

Private Sector Share of Personal Income Correlated with Per Household Personal Income by State for 2009

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