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The Honolulu Advertiser
Posted on: Friday, June 19, 2009

Hawaii leads U.S. in income growth


Advertiser Staff

Personal income in Hawai'i grew at the fastest rate of any state in the first quarter, according to new data from the U.S. Bureau of Economic Analysis.

The agency said personal income here rose 0.8 percent compared with the prior three months, driven by earnings growth in the federal civilian and military sectors because of first-quarter pay raises as well as some initial hiring for the 2010 Census.

The average personal income nationally fell 0.5 percent as earnings in 37 states declined.

The BEA's personal income data are not adjusted for inflation. When inflation is taken into account, Hawai'i's personal income actually declined last year and is expected to fall even further this year.

The University of Hawai'i Economic Research Organization is forecasting a 2.7 percent decline in "real," or inflation-adjusted, personal income this year. UHERO said its forecast takes into consideration proposed furloughs for state employees that would result in a nearly 14 percent salary reduction for those workers.

The Department of Business, Economic Development and Tourism has forecast a 1.1 percent drop in real personal income this year that doesn't take into account the proposed furloughs. Without the inflation adjustment, DBEDT is forecasting a modest 0.1 rise in personal income this year.

Personal income represents income received from all sources, including wages and salaries, business owner income, rental income, interest and dividends and transfer payments.

The BEA said Hawai'i's first-quarter gain came after two quarters of declines.

Alaska had the largest percentage decrease in first-quarter personal income at 3.2 percent.

The BEA said Alaska's decline occurred as payments to residents from the Alaska Permanent Fund returned to regular levels. There had been a special $2,000 payment to Alaska residents in 2008.