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Key Takeaways
- What executives are seeing inside their businesses right now.
- Why on-the-ground data can tell a different story than official reports.
I generally ignore government data because it is subject to significant revisions and, in many cases, relies on older methodologies. I also pay little attention to the countless surveys sent to me because their methodology and sample sizes are often dubious, and survey sponsors frequently have an agenda (“our survey shows that small businesses lack customer service software,” says a firm that sells customer service software).
So, where do you go to really find out how the economy is faring?
America is a capitalist economy, and it runs on three critical components: capital, consumers, and jobs. Follow those, and you’ll know.
For capital, follow the banks
The nation’s largest bank is JPMorgan Chase. Jaime Morgan is the CEO. On January 13th, his bank reported that the U.S. economy has remained resilient. “While labor markets have softened, conditions do not appear to be worsening,” Dimon’s team wrote. “Meanwhile, consumers continue to spend, and businesses generally remain healthy. These conditions could persist for some time, particularly with ongoing fiscal stimulus, the benefits of deregulation and the Fed’s recent monetary policy.”
The nation’s third-largest bank is Wells Fargo. Its CEO is Charles Scharf. On January 14th, he said, “In our consumer businesses, credit cards continue to see strong increases in spend and new accounts grew over 20% from a year ago.” He also said that auto lending “returned to growth with balances up 19% from the prior year” and that “In our commercial businesses, loans grew 12%.” He is not reporting significant exposures, nor has he seen a “meaningful shift” in customer data, including checking account flows, direct deposit amounts, overdraft activity and payments.
“It has been very consistent activity,” he said.
Watch consumers
How about consumers? To see how they’re doing, I listen to Doug McMillon, Andy Jassy and Ted Decker. They are the CEOs of Walmart, Amazon, and Home Depot, respectively. They last reported earnings in mid-November (Amazon’s was near the end of October), before the holidays, and their next public reports will come in early to mid-February.
In November, McMillon said, “We expect full-year net sales to climb between 4.8% and 5.1%, up from its previous expectations of 3.75% to 4.75%. Comparable sales for Walmart U.S. rose 4.5% in the third quarter compared with the year-ago period. We’re well-positioned for a strong finish to the year and beyond that.”
Jassy said, “Net sales increased 13% to $180.2 billion in the third quarter,” and that “we continue to see strong momentum and growth across Amazon as AI drives meaningful improvements in every corner of our business.”
That sounds pretty good. But given the woes in construction and housing, what about Home Depot? What Decker said wasn’t surprising — but it wasn’t terrible either.
Decker reported that his company’s results “missed our expectations primarily,” but blamed the shortfall on the “lack of storms” rather than the economy. He also said that “while underlying demand in the business remained relatively stable sequentially, an expected increase in demand in the third quarter did not materialize,” adding that he believes “consumer uncertainty and continued pressure in housing are disproportionately impacting home improvement demand.”
For jobs, listen to the payroll companies
Finally, jobs. I’m not a big fan of the numbers coming out of the Department of Labor — and neither, apparently, is the chair of the Federal Reserve. So where do I go to assess the strength of the job market? I look to the CEOs of ADP and Paychex, the two largest payroll providers in the country, whose data reflects millions of workers paid through their platforms.
“Private sector employment increased by 41,000 jobs in December, and pay was up 4.4% year-over-year,” said ADP, whose CEO is Maria Black. According to the company’s monthly Pay Insights report, “small establishments recovered from November job losses with positive end-of-year hiring, even as large employers pulled back. Year-over-year pay for job-stayers rose 4.4% in December. For job-changers, the pace of pay growth accelerated to 6.6% from 6.3%.”
Those are healthy pay increases, especially with inflation currently running below 3%.
John Gibson is the CEO of Paychex, which publishes a monthly report called the Small Business Employment Watch. Paychex most recently said that “2025 marked a year of consistency for U.S. small business job and wage growth trends. Our data reveals a continued moderation in wage inflation and little change in the rate of job growth among America’s small businesses.” Throughout the year, Gibson has repeatedly said that small business hiring was consistent.
All of this is real data from actual companies. They report to shareholders and to the public. They are liable for misleading statements. To me, these seven people provide more credible insight into their businesses — each of which underpins the economy — than most other sources I know.
And so far, so good.
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Key Takeaways
- What executives are seeing inside their businesses right now.
- Why on-the-ground data can tell a different story than official reports.
I generally ignore government data because it is subject to significant revisions and, in many cases, relies on older methodologies. I also pay little attention to the countless surveys sent to me because their methodology and sample sizes are often dubious, and survey sponsors frequently have an agenda (“our survey shows that small businesses lack customer service software,” says a firm that sells customer service software).
So, where do you go to really find out how the economy is faring?
