Today the U.S. Department of Commerce’s Bureau of Economic Analysis released new personal income data for the third quarter of 2010. As shown in Chart 1, Maine’s private sector share of personal income for the third quarter of 2010 was just above the all-time low at 62.99 percent–the low of 62.97 percent was set in the last second quarter of 2010.
Chart 2 shows the major culprit behind this crowding-out of the private sector–the Orwellian American Recovery and Reinvestment Act. In the third quarter of 2010, the ARRA pumped $212 million into Maine’s economy via personal current transfer receipts. This is down from the peak spending ($443 3illion) under ARRA in the second quarter of 2009. As ARRA spending continues to wind-down, Maine’s private sector should rebound from its all-time lows.
However, it remains an open question as to how much of the private sector will be permanently lost. As I blogged recently elsewhere, it is very likely that the private sector will continue to shrink.