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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.
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