The Bureau of Economic Analysis today released state personal income for the 2nd quarter of 2011. At first glance, the results for Michigan look bad with Michigan’s second quarter growth of 0.9% ranking 47th among the states and District of Columbia. The U.S. average for the second quarter was 1.2%.
However, as the press release notes, Michigan’s second quarter growth rate looks bad in part because income in the first quarter benefitted from bonuses paid to auto workers. Earlier this year, each of the three Michigan based auto manufacturers paid bonuses to production workers. GM paid its hourly workers bonuses of at least $4,000; Ford paid bonuses averaging $5,000 per workers, and Chrysler’s bonus was $750. As a result, Michigan ranked high in first quarter personal income growth, coming in 6th with growth of 2.4%. The average for the states was 2.1%.
The year-over-year growth in Michigan personal income provides a better snapshot since it is not distorted by the first quarter bonuses. Year-over-year, Michigan income was up 6.0% in the second quarter ranking 14th best. The year-over-year average for all states was 5.4%.
While Michigan’s quarterly ranking is not a cause for concern, the overall slowdown in national income growth is. State income growth slowed from 2.1% in the first quarter to 1.1% in the second quarter, reflecting the overall slowdown in the nation’s economy.