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A blog about the economy and the Sacramento-area real estate market.

August 6, 2009
How Sacramentans went backwards in 2008

Sacramentans' earnings were clearly affected by the recession last year, according to figures released today by the U.S. Bureau of Economic Analysis.

Per capita incomes grew by 1.5 percent during the year. That was well below the U.S. average of 2.5 percent. It was also lower than the 2.4 percent inflation rate. Which means Sacramentans lost ground during the year.

A look deeper inside the numbers show that wages went into a serious stagnation in Sacramento. Overall incomes were propped up to a significant degree by so-called government "transfer payments," which include unemployment benefits and so on. Such payments jumped 9 percent in Sacramento last year, pumping an extra $1 billion into the economy.

The numbers, which take into account the entire year, don't really reflect the free-fall that began last fall, when the financial markets collapsed and layoffs began in earnest. "The calamity was in the last quarter of the year," said David Lenze, a BEA economist. "The economy dipped slowly at first and then dropped off after the stock market crashed."

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