Incomes in the Colorado Springs area rose just 2.9% in 2018 after adjustments for inflation, the slowest among Colorado’s metro areas and below the national average, according to a new report.
The 2018 increase was down from 3.8% in 2017 and was the slowest since a 0.6% decline in 2013, said a report released Monday by the U.S. Bureau of Economic Analysis. While local incomes grew 5.8% to $35.8 billion, inflation reduced the buying power of that income by half for a real income gain of 2.9%. The 2.8% inflation rate for the Colorado Springs was the second-highest in the state after Fort Collins and ranked 33rd among the nation’s 384 metro areas.
Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum, said local incomes have grown slower as the area attracted more young workers, who are early in their careers and earn less than older workers. She said younger workers also tend to have smaller savings and fewer investments, so aren’t earning income from those sources either.
Incomes grew faster than Colorado Springs during 2018 in Colorado’s six other metro areas with Greeley posting the largest increase after inflation at 5.9%, followed by Grand Junction at 5.8% and Denver at 5.7%. The statewide average was 5.3%, second-fastest among states behind Wyoming and up from 5% in 2017, while the national average was 3.4%, up from 2.9% in 2017.
Inflation-adjusted income per person in Colorado Springs grew in 2018 by just 1%, half of the rate in 2017, well below the statewide average of 3.8% and national average of 2.9%.
The agency found the local cost of living moved higher when compared with the national average for the second consecutive year at 99.2% of the average in 2018, up from 98.4% in 2017. Nearly all of the increase came from housing increasing from 105.8% of the national average to 108.5%. Inflation in Boulder, Denver and Fort Collins was above the national average, while Grand Junction, Greeley and Pueblo all were below the average.
“For years, Colorado Springs has benefited from a low cost of living but now that factor is not helping us anymore. That makes sense for a high growth area like Colorado Springs,” Bailey said.
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. Totals for 2019 will be released Dec. 15.