Personal income resumed rise in Corridor last year

(Modified at 12:15 p.m. to correct data year in paragraph one and add dates of the recession)

Personal income growth, which stalled out in the Cedar Rapids metro area during the final year of the Great Recession, resumed a relatively healthy rise in 2010, according to data released Tuesday, August 9.

A release from the U.S. Bureau of Economic Analysis said personal income grew by 3.2 percent in the Cedar Rapids Metropolitan Statistical Area in 2010, ranking 129th among metro areas in the United States for growth. In 2009, personal income shrank by 0.7 percent, ranking the metro area 191st for growth.

Personal income grew 2.4 percent in Iowa City during 2010 after rising a scant 0.3 percent in 2009. Iowa City's personal income growth ranked 256th among U.S. metro areas after ranking 102nd nationally in 2009.

The deep recession that became known as The Great Recession began in December 2007 after the financial crisis sparked by the cooling housing market and collapse of mortgage-backed securities. The National Bureau of Economic Research has determined that the recession ended in June 2009, although the sluggish growth in the economy sense then hasn't been enough to convince many Americans that the recession is over.

Much of the improvement in both metro areas was due to recovery in the "net earnings" portion of personal income, which excludes dividends, interest, and transfer payments.

Net earnings rose 3.2 percent in the Cedar Rapids metro in 2010 after falling 2.4 percent in 2009.

The dividend and interest income portion of the personal income calculation also improved, while transfer payments fell. In Cedar Rapids, dividend and interest income rose by 0.5 percent in 2010 after falling 6.1 percent in 2009.

In the Iowa City metro, earnings rose 2.1 percent in 1010 after being flat in 2009, and dividend and interest income rose 0.7 percent after falling 5.5 percent in 2009.

Nationally, the BEA said earnings grew 2.3 percent and property income grew 0.6 percent in metro areas in 2010, reversing drops of 4 percent and 6.1 percent respectively in 2009. Earnings grew in 18 of 21 inddustrial sectosr, but growth was only sufficient to recover from the 2008 and 2009 earnings declines in two of those sectors.

Earnings continued to fall in the construction and real estate industries, with a 4.5 percent drop bringing construction earnings to their lowest level since 2001, and a 2.1 percent drop bringing real estate earnings to their lowest level in the decade that data has been tracked.

Private-sector earnings grew in each of the 15 largest metro areas and in all but 46 of the remaining 301 metro areas, the report said.