This week in 1978, Barry Gibb was at the absolute height of his superpowers. His band, a little group called the Bee Gees, held the # 1 song in the US with "Night Fever," inspired by the New York Disco scene and featured in the John Travolta blockbuster movie Saturday Night Fever. The #2 song he wrote for his brother Andy Gibb a downtempo melody called "Love is Thicker than Water." It's got the harmony (and gold medallions) characteristic of any tune the Bee Gees ever sang.  

The # 3 song? Barry Gibb's song also—well, sort of. Samantha Sang gets credit for singing the tune, officially known as "Emotion," but the thing is, he wrote, produced, and provided background vocals. The song is often confused as part of the Bee Gees canon since the group rerecorded it in 1994. Sang would go down in history as a one-hit-wonder. And there's nothing wrong with that, especially if that one hit was a Barry Gibb's creation.

Gibb, who had a better head of hair than Farah Fawcett, who had more chest hair than Burt Reynolds, who has a better falsetto than Michael Jackson, wasn't just a star this week in 1978. He was a living legend and god of pop music.

This month's economic indicators are a lot like that: hairy, an octave higher than economically expected, and legendary in their own right. Let's start with gross spending at $891 million. For January, that's an insane number ($72 million more than last year). These are supposed to be the slow months in the Black Hills. But so far, we're not seeing it, despite the dip in wages and total jobs. The same is true for housing starts, building permits, and airport passengers. And with what seems like some downward pressure on housing (as more units come into the market), what's not to like about this economy?

Here's some cold water if you're looking to splash some on your face. Vacancy rates have been creeping up. You can see it from the numbers (or just by driving around the city). Combine this with still-too-high interest rates and inflation that just won't fall below 3%, and you can see the horizon is still quite murky. 

The Fed is determined to crush inflation, so the thinking is that there may not even be a rate cut in 2024. If this happens, two headwinds are surely possible at the same time: higher interest-rate resets on commercial debt and a softening tenant demand.

That would be quite the tragedy: finally getting on the other side of inflation only to be gut-punched by an economic slowdown and vacancy rates approaching double-digits. Let's hope it doesn't get to that point, that the American consumer continues to defy conventional wisdom, and that this economy keeps stayin' alive.

Stay safe and God-speed.

Tom