Personal income in Maine rose 5.4 percent in the first quarter of the year, the third-biggest increase nationwide.

The increase was driven by a solid gain in wages, particularly in the health care sector, and an even larger jump in transfer receipts, a category that encompasses payments such as Social Security, tax refunds and benefit programs, the figures released this week by the Bureau of Economic Analysis show. Those increases were partially offset by a decline in earnings from dividends, interest and rent.

Income from wages and salaries grew by 5.4 percent and transfer receipts were up 18.5 percent, the bureau said. Almost all the states posted double-digit increases in transfer receipts because of  the expansion of refundable tax credits and an increase in Social Security benefits.

Overall, personal income nationally increased 3.4 percent during the first three months of the year, the bureau said. Regionally, Maine’s income growth was the fastest in New England, followed by Vermont (4.5 percent), New Hampshire, (3.8 percent), Massachusetts (2.7 percent), Rhode Island (1.7 percent) and Connecticut (1.5 percent).

Nationally, West Virginia (5.6 percent) and Arizona (5.5 percent) posted the biggest increases among the states. South Dakota (down 0.6 percent) was the only state to record a decline.

In addition to health care and social services, earnings in forestry, fishing and related activities; accommodations and food services; and retailing all posted strong growth during the first quarter in Maine, the bureau said. Wages and salaries in construction; transportation and warehousing; finance and insurance; information; and management all declined during the period.

Net earnings – wages and salaries minus deductions for Social Security and other government assistance programs – grew 3.4 percent in Maine, and income from dividends, interest and rent declined 2.8 percent in the state during the quarter.

Transfer receipts accounted for 3.9 percent of Maine’s 5.4 percent growth in overall income, Amanda Rector, the state economist, pointed out, and the cost-of-living boost of 2.8 percent in Social Security benefits was a big reason.

“As Maine is now the state with the largest percent of population age 65 and over, an increase of this size in the Social Security benefits has a significant impact on the overall personal income growth,” she said.

In Maine, growth in personal income is often strongest in the first quarter. Last year, for instance, income growth during the first three months of the year was 6.1 percent, but income in the other three quarters lagged. The second strongest growth last year was during the third quarter, when income grew 3.6 percent.

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