Ever wonder how an urban legend begins?
Look no further than this week in 1982, the week of an Ozzy Osbourne concert in Des Moines, Iowa, where a crazy fan threw a live bat on stage. The bat was immediately stunned by the concert lights and lay motionless.
Thinking the bat was a rubber toy and wanting to live up to his nickname as the Prince of Darkness, Osbourne walked over to the bat, picked it up, and jokingly tried to bite off its head.
The crowd gasped. And, of course, that’s precisely when the bat started flapping its wings.
Ozzy—always the entertainer—finished the show. Presumably, he sang his hit song "Crazy Train," which to this day is one of the most played songs in all sports anthems. Then he rushed himself to the nearest Iowa hospital for a rabies shot.
This month’s economic indicators are a bit like that—a bit truth and a bit urban legend. Let’s start with the truth. Wages broke another record and now stand at $936 per week. Unemployment sits at historic lows as well, coming in at 2.3%. And Rapid City set records for building permits (4,166) and building valuation ($394 million). What we don’t know, what may or may not be a legend, is how long this party lasts.
Macro-level data tells the story.
Once rates start rising, stocks lose their appeal, and investors will move into treasuries. Commercial loans will become more expensive, and mortgage rates will also rise. This could theoretically bring down housing prices in the Black Hills. Still, it could also slow business demand and growth in the region and across the country.
And it would certainly add to the federal deficit, in which the US government is currently having to pay record-low interest.
The question almost all economists are asking themselves right now is how big do the rate hikes have to be to tame inflation without going off the rails on a crazy train?
We’ll soon find out.
Stay safe and God-speed,
Elevate Rapid City President & CEO
Updated: January 21, 2022