Iowa personal income declines, but still No. 2 nationally

Iowa's personal income slipped o.1 percent in the first quarter from the final quarter of 2012, despite strong growth in farm income, according to the U.S. Bureau of Economic Analysis.

The state's personal income slid to $132.3 billion in the quarter that ended on March 31 after recording four quarters of growth. Although Iowa's personal income declined despite a 17.87 percent increase in farm earnings, it still ranked No. 2 nationally.

Personal income is a measure of the earnings received by all persons from all sources.

Personal income nationally declined an average of 1.2 percent in the first quarter, according to the BEA. Only South Dakota posted an increase, rising  1.6 percent.

The BEA partially attributed the first-quarter decline in personal income to the expiration of the payroll tax holiday. Congress allowed a temporary 2 percent reduction in the personal contribution rate for Social Security to expire on Dec. 31 without renewing it.

Earnings increased in 17 of the 24 industries for which BEA prepares quarterly estimates, with the largest increases in professional services ($15.3 billion) and construction ($15 billion).

U.S. farm earnings increased $5.5 billion (5.3 percent) in the first quarter after growing $2.8 billion (2.7 percent) in the fourth. Illinois, Iowa, and South Dakota accounted for the entire increase in the first quarter.

The BEA said crop output, particularly of corn, in the states is rebounding from the drought-related losses in 2012.

First-quarter earnings fell in seven industries with the largest decreases in finance ($39.9 billion) and durable goods manufacturing ($11.7 billion). Iowa saw a 4.59 percent drop in finance and insurance earnings.