The total personal income of Colorado residents grew 3.2 percent in the first quarter of 2019 compared with a year earlier, according to a recent research report from the Pew Charitable Trusts.
The state was among the top seven in total personal income growth for the year.
The fastest growth was in West Virginia (4.3 percent), followed by Idaho (3.7 percent), Nevada (3.5 percent), Arizona (3.3 percent), Colorado, Washington (3.1 percent) and North Dakota (3.0 percent), according to the report, published Aug. 1.
Those states were among 31 that outpaced U.S. growth in total personal income of 2.0 percent. The numbers are aggregates for each states and are adjusted for inflation.
The slowest growth was in New Hampshire, Rhode Island, Connecticut, New York, and Massachusetts, each with a growth rate of less than 1.0 percent.
The first quarter of 2019 was the second consecutive quarter in which personal income grew in every state — “a sign of underlying economic strength,” according to the report.
Personal income includes paychecks, Social Security benefits, employers’ contributions to retirement plans and health insurance, income from rent and other property, and benefits from public assistance programs such as Medicare and Medicaid, among other items. Personal income excludes capital gains.
According to the report, “[g]rowth in personal income should not be interpreted solely as wage growth; wages and salaries account for about half of U.S. personal income. Likewise, growth in total state personal income should not be seen as a measure of how much the income of average residents has changed.”
Federal officials use state personal income data to determine how to how to allocate support to states for programs such as Medicaid. State governments use personal income statistics to project tax revenue for budget planning, set spending limits and estimate the need for public services.
States’ economies have grown at different rates since the Great Recession.
“The national recovery has been long-running, but economic growth, reflected in the combined personal income of all residents, is still off its historic pace,” the Pew report stated.
From late 2007 through Q1 2019, “total U.S. personal income rose by the equivalent of 1.9 percent a year, … compared with the equivalent of 2.6 percent over the past 30 years, after accounting for inflation. The rates represent the constant pace at which inflation-adjusted state personal income would need to grow each year to reach the most recent level and are one way of tracking a state’s economic trends,” the report said.
Personal income totals tumbled nationwide except in West Virginia during the depth of the recession but have recovered in all states, albeit at far different rates. West Virginia was the only state to escape the recession, which lasted from December 2007 to June 2009, according to the report.
Since late 2007, growth has been strongest in a group of Western and Southern states, with Colorado ranking fourth among the top states.
North Dakota, the leader, has posted an increase the equivalent of 3.3 percent a year, followed by Utah (3.0 percent), Washington (2.9 percent), Colorado and Texas (both 2.7 percent), Idaho and California (both 2.6 percent), Oregon (2.5 percent), Montana (2.4 percent), South Carolina (2.3 percent) and Tennessee (2.2 percent).
The Pew reports North Dakota’s strong annualized growth since the recession to the use of new drilling technologies that led to an oil production boom. The state experienced declines in combined personal incomes after oil prices fell in 2014 and 2015, but North Dakota’s aggregate income has trended upward again since the beginning of 2018.
The slowest growing states since the recession were Connecticut (0.8 percent), Mississippi (0.9 percent) and Illinois (1.0 percent).
The report noted that in most states, the recovery was uneven, with personal income aggregates dropping in some years and growing in others.
To view the report and underlying data, visit pewtrusts.org.