Americans made an additional $ 1.1 trillion in 2020 from stimulus checks and other government pandemic aid, a new report finds.
Last year, total personal income for the nation rose 6.1 percent as a result of so-called “ transfer receipts, ” the U.S. Bureau of Economic Analysis (BEA) revealed in preliminary results released Wednesday.
Bank transfer receipts include aid such as the Coronavirus Aid, Relief, and Economic Security (CARES Act), which has sent $ 1,200 economic impact to nearly all citizens.
According to Bloombergthis income increase is the highest ever in the US since at least 1930, and has surpassed the increase in wages or property.
A report by the U.S. Bureau of Economic Analysis released Wednesday found that Americans made an additional $ 1.1 trillion in 2020
Arizona and Montana were states with the highest change in personal income at 8.4% and Wyoming was the state with the lowest change at 2.4%
The BEA analysis found that 2020 was at least the second year in a row of growth for personal income, after it also rose 3.9 percent in 2019.
Remittance receipts were found to be the main contributor to the increase in personal income in each state, accounting for the full $ 1.1 trillion.
The support of the CARES Act outstripped other forms of aid, such as state unemployment insurance benefits, Medicaid payments, Medicare benefits, and Social Security checks.
Arizona and Montana were equal for the states with the highest change in personal income at 8.4 percent.
The other three states that round out the top five are Utah, Idaho, and Rhode Island, respectively.
Conversely, Wyoming saw the least change in personal income at just 2.4 percent, the analysis found.
The Cowboy State was closely followed by Connecticut, Alaska, North Dakota and Wisconsin respectively.
The report also looked at wages, which rose just 0.3 percent in 2020, the smallest increase since 2009, when the Great Recession hit.
The Middle East – comprising Delaware, the District of Columbia, Maryland, New Jersey, New York, and Pennsylvania – saw the largest drop in wages at 1.4 percent overall.
Revenues were down in several industries with the largest losses in services such as accommodation and arts, and the largest increase in scientific and technical services.
The BEA also found that property income for the US fell 1.1 percent last year, after an increase of 1.3 percent in 2019.
The increase in income was found to be entirely due to ‘transfer coupons’, including incentive checks and other government assistance under the CARES Act (above)
Government support from programs such as economic aid payments was much faster than wage growth, which increased by 0.3%, or property income, which decreased by 1.1% (image file)
It comes on the heels of news from the Department of Labor that unemployment claims fell by 97,000 to 684,000 last week.
Meanwhile, the four-week moving average fell by 13,000 from the previous week’s average of 749,000 to 736,000.
Economists predict that unemployment claims will fall even further as more Americans are vaccinated and restrictions on businesses are lifted.
“For the first time since the start of the pandemic, new claims for unemployment benefits have fallen below 700,000,” said Mark Hamrick, senior economic analyst at Bankrate.com. US News & World Report
“This is probably a sign of even better things to come for the country’s battered economy and the millions of people who are unemployed, underemployed, or have left the labor force but still want to work.”