U.S. personal income growth is the highest ever in 2020 due to impetus

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(Bloomberg) – Americans made an additional $ 1.1 trillion last year – most of the data from 1930 – solely from stimulus checks and other government aid.

Total U.S. income rose 6.1% to $ 19.7 trillion last year as a surge in aid from the pandemic outpaced gains in wages, real estate values ​​and other wealth sources, according to the US Bureau of Economic Analysis.

The dollar amount of so-called remittance slips, which include Covid bailout payments, drove income growth in 26 states, while the increase in other types of personal income drove it in 25 states including the District of Columbia, preliminary estimates show.

Income versus transfers

The report reveals the importance of government aid programs in propping up Americans’ finances as the world’s largest economy recovered from the pandemic. In addition to the stimulus checks, the data suggests that an additional $ 498 billion in government unemployment benefits was spent last year.

Personal income growth ranged from 8.4% in Arizona and Montana to 2.4% in Wyoming. The increases were strongest in the west.

2020 wages

For the nation, wages rose 0.3% in 2020, the smallest increase since 2009. Northeastern and midwestern states, which saw industrial declines, saw wages decline the most over the past year.

The new data, released on Wednesday, also provides insight into the impact of the pandemic on industrial economies. For example, New York’s arts, entertainment, and recreation sectors suffered a loss of $ 7.8 billion while housing and meals declined by $ 10.1 billion.

© 2021 Bloomberg LP

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