Income growth Vermont posts 2nd fastest increase in the country
MONTPELIER -- Vermont boasted the second fastest personal income growth in the nation for the first quarter of 2014, indicating broad economic strength in the state despite losses in manufacturing, according to new statistics.
Federal data released Tuesday by the U.S. Bureau of Economic Analysis showed that personal income in Vermont increased about 1.4 percent in the first quarter. The national average was 0.8 percent.
Vermont leads New England in personal income growth. Washington state had the fastest growth nationally.
Vermont workers with the biggest earnings gains were in construction and professional, scientific, and technical services.
For months, Vermont has had one of the lowest unemployment rates in the nation. In April and May, the rate was 3.3 percent. Gov. Peter Shumlin said the overall trend indicates economic strength.
"While there are adjustments quarter to quarter in personal income growth and the unemployment rate, the trends are that we are showing signs of strength in the economy, not weakness," Shumlin said in a Wednesday statement.
Jeff Newman of the Bureau of Economic Analysis said in an email: "Of course, strong earnings growth of employees in a category can correlate to strong earnings growth for a particular business."
Burlington-based Dealer.com, a software and digital marketing company, is one place employees followed the positive trend. Some employees received large sums of money from cashing out shares when the company was acquired by New York-based company Dealertrack, according to company spokeswoman Alison von Puschendorf.
The company was sold for $620 million and 8.7 million shares of Dealertrack stock. The acquisition was announced in December and closed in March.
But revised economic statistics can change the picture. For example, the bureau originally reported a 1 percent decline in national GDP but revised it Wednesday to a 2.9 percent decline -- the biggest contraction since the recession five years ago.
"There isn’t a lot of other data that backs up this release on personal income but, again, given as it is, it still is good news," said Richard Heaps, a company principal with Northern Economic Consulting in Westford. "It may be revised away, but it’s still good for now."
Personal income growth includes income of all residents and companies, including retired persons. Social Security payments are indexed at the end of the year so they provide an increase in state personal income, said Heaps.
"Given that Vermont is an older state in the nation, it’ll give us a bigger boost than neighboring New York or Connecticut, but it’s not enough to be the whole reason," Heaps said.
Total earnings growth for Vermont was $214 million in the first quarter of the year. Although many Vermont industries experienced growth, there was an $11 million earnings drop in the manufacturing of durable goods.
Vermont business leaders and state officials are currently working to secure 4,000 IBM jobs in Essex Junction. The jobs could be in danger if the company sells the plant.
"We’re getting mixed signals about the economy," Heaps said. "Some good news, but not everyone’s sitting there with a smile on their face."
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