Personal income grows in Colorado
Colorado residents made more money in 2008 than they did in 2007, but income gains failed to keep pace with population growth, according to a report Tuesday from the U.S. Bureau of Economic Analysis.”The latest release of data is mixed news for Colorado,” said Gary Horvath, managing director of the business-research division at University of Colorado at Boulder’s Leeds School of Business.Total personal income, which includes wages, dividends, rent payments, government transfers and other items, grew 4.9 percent in Colorado last year, better than the 3.9 percent increase nationally.But Colorado’s population rose 2 percent last year, more than double the 0.9 percent increase nationally.Per-capita personal income in the state, income divided by population, was $42,377 in 2008 compared with $41,192 in 2007, a growth rate of 2.9 percent.In short, Colorado ranked 10th for income gains but fifth for population growth last year. On a per-capita basis, the state’s income growth only ranked 30th.That pushed the state, which for years could brag about ranking in the top 10, from 11th to 13th for per-capita income. Wyoming, by contrast, held the fourth spot, with per-capita income 17 percent higher than Colorado’s.Moving forward, Horvath said the recession has fewer families relocating, so income dilution from population growth should be less of an issue.What concerns him more is that industries driving income gains last year are now cutting jobs and that higher-paying jobs are being replaced by lower paying ones.Income increases from health care and professional and technical services in particular offset income declines in manufacturing and construction in 2008, Horvath said.In a sign the recession has arrived in Colorado, total personal income in the state fell 0.11 percent in the fourth quarter from the third, reflecting a sharp drop in payments from dividends, interest and rents.And income losses may increase once revisions are made, cautions Bill Kendall, an economist with the Center for Business & Economic Forecasting.”The picture in the preliminary estimates that just came out may be too rosy. They don’t include too much data from what was a very bad fourth quarter,” he said.