Oklahoma Personal Income Falls 1.6% in Q1--Among the Nation's Worst

The U.S. Bureau of Economic Analysis reported this morning that state personal income declined by 1.2% across the nation in the first quarter of the year. The BEA attributed the decline to the increase in payroll taxes at the beginning of the year.

In Oklahoma though, the news was even worse. In the Sooner State personal income declined by 1.6% in Q1, which ranked 43rd among the 50 states. Furthermore, manufacturing earnings in Oklahoma fell more than in any other state in the nation.

There are two key takeaways from today's report. First, on the national stage the contractionary fiscal policy being implemented by Congress is having an effect in slowing income growth across the nation. With unemployment remaining above 7.5%, tax increases and spending cuts are the opposite policies that our leaders should be pursuing. Perhaps in bizarro world contractionary policy expands the economy, but in the real world contractionary policy contracts the economy.

Second, for Oklahoma this report confirms what I've been detecting for months...that the Oklahoma economy slowed considerably early this year. Even though state officials still kept touting the strength of the state economy...the data that was coming in pointed to a considerably weaker state economy. The good news though, is that my data has been indicating that the state economy strengthened a little in the second quarter of the year...so the next state personal income report could very well look much better.