This week in 1966, singer and actress Nancy Sinatra hit #1 on the UK charts with "These Boots Are Made For Walkin'," a bit of up-tempo, shuffling, folk-pop goodness featuring the now famous phrase, "one of these days these boots are gonna walk all over you."  

The song was originally written by Lee Hazelwood and from a man's perspective. But Frank Sinatra (yep, that guy) convinced Hazelwood to put a woman's perspective on the song so it wouldn't seem abusive and cruel. Obviously, it was the right choice, as the song has been covered by artists as diverse as Jessica Simpson (with an odd appearance from Willie Nelson) and the hardcore metal band Megadeth, whose version will definitely test your threshold for thrashing. It's also been featured in movies like Stanley Kubrick's film Full Metal Jacket, Oliver Stone's Natural Born Killers, and Mike Myers' Austin Power: International Man of Mystery. Strangely enough, the FBI also used the song as psychological warfare against cult leader David Koresh at Waco.

This month's economic indicators are a bit like that. They're meant to mess with your head. That's because the economy continues defying the logic of the Federal Reserve, which continues to raise rates to try and trim inflation. With the Prime Rate at 7.75% and likely to continue to go up, traditional economics would tell you to expect a slowdown.  

But we're seeing something else. Sure, airport passengers and hotel occupancy are down, but it's the middle of winter, and gross sales in Rapid City are still three-quarters of a billion dollars in a single month. Unemployment is still at a record low, and labor force participation levels have returned to pre-pandemic levels. To make things even wackier, all this interest-rate adjustment has done little to drive housing down in the Black Hills. So, while you're hearing all about the Phoenix and Denver housing markets crashing back to earth, the local market has yet to experience much of a downturn at all. Same with building permits, building valuations, commercial vacancy, and new housing starts.

This can't continue for another six months, can it? Last month, we speculated that with inflation starting to creep down, it might be within the realm of possibility that we get a softer recession than previously thought. 

While that possibility still exists, as evidenced by the consistent demand for men's underwear (Allen Greenspan's favorite leading economic indicator), we're still of the opinion that a recession is likely.  

One leading indicator is new orders for manufacturers, which are flashing red. Same with yield curves. Same with stock-market valuations. And sure enough, just as we went to print with this month's indicators, inflation came in at 6.4%, down from 6.5% the previous month, but not nearly enough to keep the Fed from jacking up rates even further.  

We're not quite ready to say these economic boots are ready to walk but don't be surprised if the tech sector continues to get stepped on and it spills into other sectors in the middle of the year.