This week in 1986, hair metal reached its magnificent, hairspray-drunken peak when Bon Jovi’s "Livin' on a Prayer" held on to the #1 spot for an whole month. The Gen X anthem about a working-class couple struggling through hard times perfectly captured the blue-collar dreams of the 1980s. With its iconic talk-box guitar, explosive chorus, and a key change that still causes spasms of air guitar outbreaks worldwide, the song became the ultimate power ballad for anyone who's ever been down on their luck.
Musical snobs may disagree, but hair metal may be the greatest genre ever created. The higher the hair, the closer you are to heaven. And Bon Jovi were godly. They may have dressed like they raided a sale rack at Spencer's Gifts, but beneath all that Aqua Net, they created anthems that somehow remain both ridiculous and transcendent at the same time. And “Livin’ on a Prayer” is the band’s poster child. According to Rolling Stone, it’s one of the top 500 songs of all time. We can’t disagree.
This month’s economic indicators are a lot like that. Wild and ridiculous, and you can’t figure out what’s coming next. Consider first, employment. The average weekly wages have dropped to $1,019.71 (down 2.06% year-over-year) while nonfarm employment has climbed to 74,300 (a 1.5% gain). It was just last month Rapid City hit an all-time high in wages, so we’re going to take this one-time drop with a grain of spandex.
Gross sales continue their downward slide to $709.4 million (down 3.24% year-over-year), extending the declining trajectory we've observing locally and nationwide as the idea of a recession stays at the forefront of the economy. And yet building permits overall have surged from 127 to 206, though building valuation has fallen from $25.7 million to $17.8 million. We're seeing more projects but at smaller scales, sort of like trading area tours for smaller venues like county fairs.
The real estate market is harder to assess than Bon Jovi’s legacy. Days-on-market have plummeted dramatically from 56 days to just 43—a headbanging 30.87% improvement over last year. And the median list price in the zip code of 57702 has hit $552,400 (up 7.28%), while the 57703-zip code has fallen to $399,000 (down 7.21%). This geographical disparity isn’t new, but it’s also interesting to see the different zip codes moving in opposite directions.
Tourism (so far) remains strong, with airport passengers soaring to 56,994 (up 7.7% year-over-year) and hotel occupancy holding steady at 59% with an 11% year-over-year improvement. No data yet on how foreign and domestic visitors will impact our market given there is a lot of fear in the media and anecdotal evidence of cancellations. But it’s just too early to tell.
President Trump's tariff saga continues like an extended drum solo. While technically dramatic and impressive, it’s difficult to interpret through the lens of capitalism and economic theory. The initial shock on Chinese imports has morphed, with some exceptions carved out for semiconductors and consumer electronics. The US and China even announced a cooling off period for 90 days.
One surprising development is the drop in inflation: both national and regional consumer price indices have fallen to 2.8% and 2.7% respectively, down from 3.1% last month. This slight cooling of inflation suggests our economy might be finding more balance than the national narrative will have you believe. But again, it’s too early to tell. It appears like The Fed feels the same way, holding interest rates in a fog-machine of contradictory data and stories of the potential for empty shelves. They might be livin’-on-a-prayer, but their actions are more take-my-hand-and-we’ll-wait-and-see.
And so, we shall. Until next time, stay safe and God-speed,
Tom
