Income Tax, Economic Opportunity for All, Personal Income
GSI Analysis: Q3 Personal Income: New Jersey Incomes Rebounded in the Third Quarter
Growth ranked 8th in the nation
Surge in wages and business income led the advance
On December 17th, the United States Bureau of Economic Analysis issued its report on the Personal Income by State for the 3rd Quarter of 2021, covering July through September. Dr. Charles Steindel, former Chief Economist of the New Jersey Treasury, analyzed the report for GSI:
New Jersey residents’ personal incomes grew at a 4.4% annual rate in the third quarter, outstripping the nation’s 2.6% figure. We ranked 8th nationally, with Delaware the only state in the Northeast surpassing us. Our growth was led by a robust 11.0% rate of growth in “net earnings” (employee compensation plus the income of unincorporated business); that surge offset the collapse in transfer payments associated with the fade-out of federal pandemic relief programs.
The strong growth in earnings in the third quarter are probably a major contributor to the strong income tax figures the state has seen in recent months.
Over the last four quarters New Jersey’s personal income has grown 5.2%, matching the national figure. In 3 of the last 4 quarters New Jersey’s performance was better than the nation, but this was offset by a much weaker number in the first quarter of this year.