Economic Indicators: January 2021
In 1987, legendary band Def Leppard came out with one of the all-time great arena rock songs of the entire decade, “Pour Some Sugar On Me.” The song reached #2 on the billboard charts and eventually was ranked as the #2 song of the 1980s by VH1. It was the quickest song the band ever wrote and recorded. And it goes to show that sometimes - well sometimes greatness just happens in an instant.
January’s Economic Indicators, our first set of economic indicators for 2021, pours the sugar on, too. First, notice that we’ve adjusted Rapid City’s trade-area population to 145,248. This represents a growth rate of more than 1% over the last year. And it puts Rapid City on par with the growth rate of Sioux Falls over the same time period. Indeed, the migration data also supports this notion. In the last three tracked years (2016-2018), Rapid City pulled more people from Sioux Falls than Sioux Falls pulled from Rapid City (59 residents, but who’s counting). Be sure to tell all your friends in East River.
Second, the unemployment rate for Rapid City held steady at 3.7% for a second straight month, while average weekly wages rose to $878 (8.5% higher than twelve months ago) and gross sales in the region grew by 9%. The correlation between spending and wages suggests that, as people earn more overall, they are spending those additional earnings in the local economy. So things are sweeter still.
Third, although it’s only one data point, it appears as if the commercial real estate sector may have rounded the corner. Market rents and vacancy rates basically held steady since last month. Previously, both had been deteriorating as a result of the pandemic. So it’s a good sign - we’re just not ready to get carried away as commercial real estate still faces both pandemic and Amazon headwinds. And it’s also too early to tell on residential real estate, where both available listings and prices dropped in the last month. Usually the two run counter to one another, so we’re attributing this to an end-of-the-year blip or too many sugar cookies.
Finally, one noticeable change in this months’ Indicators is that we’ve added two agricultural metrics, the price of feeder cattle and the price of corn. This came at the suggestion by Elevate’s Ag and Natural Resources committee. As we track these two stats over time, we’ll have more to say about them, but for now, suffice to say that both of these prices will likely continue to rise in 2021 with inflationary pressure expected to come as a result of a further stimulus packages out of Washington DC.
President & CEO
Updated: January 26, 2021