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Personal income rises in state

Associated Press

ST. PAUL — Minnesota’s total personal income accelerated in the first quarter of 2007, growing 2.1 percent from the previous quarter and offering a bright spot in a recent stream of sour state economic data.

Strong pay growth in the finance sector boosted the growth rate significantly higher than the previous quarter’s weak 0.8 percent jump in personal income. It’s the strongest showing in a year, according to a report released Thursday by the U.S. Department of Commerce.

The fast growth lifted Minnesota to No. 17 among states, up from a previous ranking on the low end — 46th in per-capita personal-income growth in March. The state’s job growth and gross domestic product have also in recent months been lagging behind the national average.

"This is the first good sign of good news in a while," said Dave Senf, a labor-market analyst for the state Department of Employment and Economic Development.

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Personal income is considered pretax income from all sources such as salaries, Social Security checks and stock dividends.

Minnesota still fell a bit short of the 2.2. percent national average growth rate, but only five states beat the average, largely thanks to Wall Street. The finance industry accounted for nearly 40 percent of the nation’s earnings growth in the first part of the year, and the top five states — New York, New Jersey, Connecticut, Illinois and Delaware — are all tightly tied to it.

Big payouts in finance also lifted Minnesota’s boat. The state ranks 12th in the nation in terms of its share of the work force in finance, and that sector accounted for 36 percent of the state’s earning growth — the biggest contributor by far.

The sector includes a wide range of financial institutions including banks, mortgage and securities brokers, portfolio managers, insurance carriers and pension funds.

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