Economic Indicators

This week marks the 34th anniversary of the release of Guns N’ Roses’ debut album “Appetite for Destruction.” Has there ever been a better debut? Perhaps, but some of the best stadium-hits of all time come from this album—songs like “Welcome To the Jungle,” “Paradise City,” and the bands only No. 1 song in America, “Sweet Child O’ Mine,” which leads with an absolutely unforgettable riff from guitarist Slash and a really clever lyric from lead singer Axl Rose: “She’s got a smile that it seems to me, reminds me of childhood memories.” Try that one as your next pick-up line at the bar and report back to us.

Another bit of trivia about the song—it was born out of a jam session. When Axl asks a question with the lyric, “Where do we go?  Where do we go now?”, he’s not really talking about his relationship with then model girlfriend Erin Everly, which the song was based on, but rather, he’s literally asking the question from the jam session about the song—in other words, where do we go with this song? The band thought the lyric was cool enough to stay, and the rest, as they say, is history.

This month’s economic indicators are a bit like that. We are left asking ourselves, where do we go from here?  As we predicted for the last several months, unemployment continues to drop, now at around 3%, which puts Rapid City No. 28 in the country for lowest unemployment rates. Wages continue to rise, and for the first time, average weekly wages in Rapid City ($898) are now consistently higher than that of rival Billings, Montana ($854). In the past this has rarely been the case. Rapid City is even within striking distance of Sioux Falls ($917). Earlier in the year we noted that Rapid City was now experiencing an in-migration from Sioux Falls in population, so it makes sense.

More good news? You’ve got it. June’s gross sales were over $720 million, which is a 32% increase from a year ago. Airport boarding are up over 266%. And building valuations have already hit almost $200 million in half a year. There is even some good news on the real estate front. Listings are up from last month and prices are about the same from a year ago. Still, in the Rapid City market, $365,000 for the median list price is heated up. In fact, just this week The Wall Street Journal rated Rapid City as the 4th hottest in the country. If you read the fine print from the article, Rapid City is acknowledged for rising wages and amenities, so there’s that.

The challenge continues to be inflation. We just don’t know where it’s going. Supply chains are still being stretched. Inventories are down across the board, whether manufacturing or retail, and commodity prices are still rising. I know the Fed keeps sending out the signal that things are OK but keep an eye out in the next month. I don’t think the inflation data can be ignored much longer without a discussion about interest rates rising, as the Washington Post explains

So where do we go from here? Let’s hope the Fed is right and prices (and bottlenecks) do return to normal near the end of the year. Until then, we’ll be here, monitoring the situation and putting our Gun N’ Roses on replay.

Stay safe and Godspeed

-Tom Johnson,
President & CEO

Updated: July 21, 2021

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