Personal income for Colorado residents grew by 1.8 percent during 2006’s first quarter compared with the fourth quarter last year, the fifth-biggest increase of any state in the U.S., according to a report released Thursday by the Bureau of Economic Analysis.
Despite the growth in personal income, other studies show that real wages – or wages after adjusting for inflation – have remained flat or declined.
Personal income – the sum of wages, rental-property income, dividends and interest – grew by 1.4 percent on average nationwide, the study showed. That compares with a 1.9 percent increase during the fourth quarter of 2005.
The decline nationwide in the rate of personal income growth was caused – at least in part – by a slowdown in property income, which increased by 0.7 percent in the first quarter. That compared with a 9.3 percent increase in the fourth quarter of 2005, a rebound inflated by the weak third quarter caused by Hurricane Katrina.
At least half of the earnings growth nationwide, excluding the Southwest, came from workers in five industries: health care, professional services, administrative services, finance and construction.
Compared to other states in the Rocky Mountain region, Colorado outpaced its neighbors. Personal income grew by 1.6 percent in Utah, 1.3 percent in Wyoming, 0.5 percent in Idaho and 0.4 percent in Montana.
“More than anything, (Colorado residents) should feel confident that the state’s economy is healthy,” said University of Colorado economist Richard Wobbekind.
Personal income in Arizona grew by 1.9 percent, fourth best in the country.
However, inflation may be taking a toll.
Weekly wages adjusted for inflation fell 0.7 percent last month and are down 0.2 percent over the past year, according to a report last week by the Labor Department. Pay has been flat or declined in more than half of the 65 months since January 2001.
Wobbekind said inflation in Colorado has remained tame compared to most of the U.S., partly because of the state’s slow home price appreciation.
Bloomberg News contributed to this report.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
