Personal income in Colorado fell during the fourth quarter of 2009, dropping 1.2 percent from the fourth quarter of 2008, and 0.95 percent from 2009's third quarter. According to a report released by the Bureau of Economic Analysis last week, total personal income in Colorado fell $2.5 billion year-over-year to a total of $209 billion during the fourth quarter of 2009. Colorado has shed 4.8 billion dollars in personal income since it peaked during the third quarter of 2008 at $213.9 billion.
Declines in personal income mirror continued job losses as employment growth continues to be negative and unemployment has slowly increased. The not-seasonally-adjusted unemployment rate rose in February to 8.3 percent, up from 7.8 percent a year earlier. Of all states, Colorado experienced the 17th largest decline in personal income.
Nationwide, state personal income declined an average 1.7 percent in 2009, according to estimates released today by the U.S. Bureau of Economic Analysis. The annual percentage change in state personal income ranged from -4.8 percent in Nevada to 2.1 percent in West Virginia (one of six states with a personal income gain in 2009). Inflation, as measured by the national price index for personal consumption expenditures, fell to 0.2 percent in 2009 down from 3.3 percent in 2008.
In the states with the largest personal income declines in 2009, the industries with the largest earnings losses typically reflected the states' distinctive economies: Nevada's 4.8 percent personal income decline, the second largest decline among states since 1969, is mostly accounted for by construction and the accommodations industry (which includes casino hotels). The biggest contributors to Wyoming's 3.9 percent personal income decline were mining (including oil and gas extraction) and construction. In New York, where personal income fell 3.4 percent, the earnings losses were primarily concentrated in the finance industry.
The biggest earnings decline in Connecticut was also in the finance industry, but manufacturing and construction declined almost as much. Michigan's 3.0 percent personal income decline reflected large losses in durable goods manufacturing. The industries contributing the most to the 2.5 percent fall in personal income in California, and the 2.7 percent fall in Arizona and Florida were construction and manufacturing. Farming can account for all of South Dakota's 3.5 percent personal income decline.
Like Wyoming, Colorado has been impacted by declines in oil and gas extraction. Colorado also continues to see significant declines in incomes among workers in real estate services and home building.