While the local inflation rate slowed to 2.3% in 2019 from 2.8% in 2018, it was exceeded only by Greeley’s 2.6% inflation rate among those metro areas, according to data the agency released this week. Colorado Springs’ inflation rate was slightly ahead of the statewide rate of 2.2% and well ahead of the national rate of 1.5%, though prices in Colorado Springs still remain slightly below the national average.
Nearly all of the reason for the inflation was housing costs, which increased at 2.9% and were 11.4% above the national average, the agency found. Other goods and services increased slightly. Prices in Colorado Springs were 99.3% of the national average last year, the closest they have been to the average since 2015. Prices in Boulder, Denver and Fort Collins were all above the national average in 2019.
“One of the advantages our region has is being relatively affordable, but a lot of people are moving here and inflating housing prices,” said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum.
“We are not moving in the right direction on housing (affordability) and I don’t see that changing soon. If anything, it will get worse. The question is whether we will become like Denver with people leaving due to the cost of living. We are still a ways from that, but I don’t like the rate of increase, especially for housing.”
The inflation data was part of the bureau’s report on inflation-adjusted incomes. Inflation trimmed local income growth last year from 5.5% to 3.2%, with higher prices eating up more than 40% of the benefit of growing incomes. Inflation in the Denver area last year was 1.9%, reducing inflation-adjusted income growth to 4%. Grand Junction had the slowest real income growth among the seven metro areas at 1.5%, with inflation subtracting nearly 60% of the growth.
The agency calculates inflation-adjusted incomes to better compare the buying power of personal income across states and metro areas. Income includes wages, salaries, business owners’ incomes, rental income, dividends, interest, pensions, welfare and other government payments. Price data comes from the U.S. Bureau of Labor Statistics, while housing costs come from the U.S. Census Bureau.