| June 28, 2011
Oklahoma’s private-sector share of income below the national average
Last week the U.S. Department of Commerce’s Bureau of Economic Analysis released new personal income data for the first quarter of 2011 by state [PDF] and revisions for the past couple of years. As shown in Chart 1, Oklahoma’s private sector share of personal income for the first quarter of 2011 was at 64.5 percent—or 6.9 percent smaller than the national average. While this is the highest point since the second quarter of 2009, the private sector has essentially been moving sideways. Higher prices for oil and natural gas have certainly helped fuel this spike in the private sector—with growth faster than the national average—but it remains to be seen if this will continue.
Chart 2 shows the major culprit behind this crowding out of the private sector since the beginning of the “Great Recession” —the Orwellian “American Recovery and Reinvestment Act” (ARRA). In the first quarter of 2011, the ARRA pumped $621 million into Oklahoma’s economy via personal current transfer receipts [PDF]. This is down from the peak spending ($1.048 billion) under ARRA in the second quarter of 2009. As ARRA spending continues to wind down, this will help Oklahoma’s private sector rebound from its all-time lows, though it puts a drag on overall personal income growth.