Thursday, March 28, 2013

Colorado per capita personal income up 2.5 percent in 2012

Per capita personal income increased from 2011 to 2012 both nationwide and in Colorado. According to new data form the Bureau of Economic Analysis, released yesterday, per capita personal income increased 2.7 percent form 2011 to 2012, while it increased 2.4 percent in Colorado. 

The first graph shows year over year changes since 1991 in Colorado and nationwide. We can see that during the 1990s, Colorado frequently outpaced the nation, but that Colorado has outpaced the nation only once during the last seven years. 

Since the peak period of 2008, per capita personal income is up 4.2 percent nationwide and 2.2 percent in Colorado. 

Over the past decade, from 2003-2012, the national per capita personal income is up 32 percent, and it is up 27.8 percent in Colorado. 

Why is this? Well, some of this is due to the fact that income growth in Colorado has indeed been sluggish since the 1990s dotcome boom.  But, being a percapita measure, Colorado's penchant to lag the nation is also due to the fact that many young workers (who, being young, have lower incomes) are moving to Colorado is fairly high numbers. Colorado is also experiencing more population growth overall than the nation.

The second graph shows population growth according to the BEA's measure used in the per capita calculations.

Year-over-year, the US population was up 0.7 percent and Colorado was up by much more: 1.3 percent.

Indeed, in every period going back to 1991 -except the post-recessionary year of 2003- Colorado population growth has outpaced national population growth.

This doesn't mean that income growth in Colorado is secretly robust however. There is reason to believe that income growth is still not performing as well as we'd like. Several metro areas still report high unemployment rates (such as Pueblo and Grand Junction). Nevertheless, the robust population growth helps to keep down per capita numbers.