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.
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.
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.