In today’s episode of Retire in Texas, Darryl Lyons, CEO and Co-Founder of PAX Financial Group, explores a timely question: Is the economy actually doing better than we think?
While pessimism often dominates the news cycle, this episode highlights five key indicators that suggest economic resilience in 2025 – and what that means for long-term investors.
Darryl breaks down:
-Why employment trends may be stronger than they appear – even with recent layoffs.
-How recent corporate earnings from companies such as Nvidia, Microsoft, and Meta have been interpreted as signals of underlying strength.
-The real-world impact of AI in business and how it’s driving profitability and efficiency.
-What investors should understand about tariffs, trade policy, and global supply chains.
-How recent deregulation is giving companies room to grow and innovate.
If you’ve been wondering, “Should I still be investing right now?” or “What economic data actually matters?” – This episode offers thoughtful perspective.
Tune in to gain clarity, filter through the noise, and make informed decisions rooted in your values and the broader economic landscape.
Transcript:
Hey, this is Darryl Lyons, CEO and Co-Founder of PAX Financial Group. And you’re listening to Retire in Texas. This information is general in nature only. It’s not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information. Building wealth comes with clarity, with purpose, and peace. And we really guide our conversations around 1 Timothy [6:17] through 19. So, I want to help you grow your net worth without losing your grounding.
And if that’s what you’re after, then you’re definitely in the right place. And today I want to talk about pessimism. That always exists in the marketplace. There’s always something to worry about. But I want to give you five reasons why there is a substantive, healthy market. When I say market, there’s two different markets. There’s the economy, and then there’s the stock market.
And so, sometimes those behave lockstep and sometimes they disconnect. And sometimes the data disconnects and so I’m going to unpack five data points that we should have a better understanding of and just understand how a lot of times those can get politicized to force a certain agenda and we anchor to some of these things. So, I’m going to talk about these five data points.
And I think these data points are important to understand when you default, and the human brain will default; the flesh will default to pessimism. And this fear really paralyzes a lot of people. And over the years since I’ve been doing this a long time, I’ve seen a lot of the times people really anchor to this fear.
And they wake up five years later, ten years later and regret that they didn’t save more. They didn’t invest in the lives of others. They didn’t take more risk. And they have a lot of regrets. And I don’t want that to be you. So, if you are here to grow your net worth without losing your grounding, you’re definitely at the right place.
So, let’s start with bullet point number one that I want to address. And that’s really just employment and employment. Obviously, people having jobs is the very backbone of the economy. The majority of jobs are with small businesses. So, the very health of small business, and our economy is just being, having this entrepreneurial environment that does not exist outside of the United States.
That’s a different show, but it’s an important one for you to know. Now, a lot of times we measure employment through the big companies. So, like Walmart and Home Depot, are they still hiring? And namely, it’s because the data is much cleaner than small business employment. Although that data does exist. But if you think about Walmart and Home Depot, they are hiring aggressively, especially in logistics and supply chains.
And, if they thought the economy was slowing down, you wouldn’t see hiring from them. So that’s kind of like clues on whether or not companies believe the future is bright when they’re hiring. Even Southwest and Delta, they’re hiring as well because the travel’s up and people don’t travel if they’re worried about their jobs or their income.
So, you know, Southwest, Delta, they’re expanding flight routes. That’s a good indicator. Again, this is all around employment because when people work, they spend money on groceries and travel and home improvements and that, you know, that helps publicly traded companies, that help small businesses. And ultimately, it helps stocks that you invest in. The thing about these employment numbers, which there, today’s August 1st and listening to the markets this morning, there’s a lot of conversations about employment, a lot.
And it was fascinating the angles people took on the employment numbers. So, this is August 1st. The data I’m giving you is a little bit delayed, but we have new information about employment and some of, there’s some softness in employment right now, meaning there is reason to believe that hiring is slowing down. And the reason this is very interesting is one, like I mentioned before, people politicize this big time.
But two, this is the key for you to understand if unemployment goes up and a lot of the data that we use is like to predict unemployment, if unemployment goes up, the Federal Reserve will, hear me out. They’ll lower interest rates and lower interest rates is exciting for a lot of people to build homes and borrow money. So, these are all like clues for a future fed decision.
And that’s why it’s so interesting. But employment, just remember this. Employment numbers are absolutely politicized. Let me give you an example. In May, the economy added 139,000 jobs. Okay. So, I think the question is, is like that is that a lot of jobs at all, like what really matters is what were people expecting? Right.
C.S. Lewis said expectations are everything. So, what were they expecting? 150,000 and 200,000. Well, they were expecting 125,000. So, it exceeded expectations. The number of jobs in May exceeded expectations. So, you can see how this can get publicized. But the market in the economy and all the economists, they tend to like things that exceed expectations.
And so, there’s that element of the economy of not only, are we doing good? Are we doing good, better than we expected? And is there a trend that we can see here? So, it’s a tricky one, but as of today, the economy is still healthy. Despite some of these federal layoffs that Trump had, health care still doing good.
Hospitality’s killing it. Of course, there’s warning signs out there, but generally speaking, we do have healthy employment. It’s been a lot of time on employment. I don’t think I can cover all five with as much detail as I did the first one, but let’s try. Okay, number two – earnings. Earnings have been better than expected, earnings or income from companies as you would imagine.
And Microsoft and Nvidia are crushing it at least in the last quarter. So, this information is all real time. Things happen real time. I’m talking about first quarter stuff. I do have some information on second quarter, but it’s so fresh off the press. I mean, it hits my email every day on earnings reports. So, I just want to tell you about first quarter Nvidia and Microsoft killed it.
McDonald’s actually did well, companies like United Health Care. You know, hey I don’t know this to be true, but I do know, like, I don’t know if revenue killed it, but I do know that they’re managing cost better. And so that’s a big factor. So not only, for earnings, do you sell more products, but you also manage your cost.
And so that’s a big deal. Exxon Mobil’s resilient despite, you know, oil prices being low. They’re very well diversified even Meta, of course. Meta, Facebook, Instagram. They paid out a dividend, which is a big deal. So, they’re showing a lot of, promise. Google. I mean, you’re on YouTube all the time. So, you know, Google’s making money.
I thought Google was going to struggle because people were going to start doing search engines on ChatGPT, not Google, but YouTube is killing it. JPMorgan is doing good because of the higher interest rates. Costco. I don’t know. Every time I look at Costco there, it’s a full parking lot. Eli Lilly with these weight loss drugs. So, the thing about it is earnings are good.
And so I just want you to know, these aren’t necessarily flukes. The economy is, corporate America specifically, is showing resilience, but it’s adapting. So, there’s industries that may not survive and there’s industries that are thriving and so you just kind of have to understand that we are adapting and we have adapted to innovation in technology.
But generally speaking, earnings have been pretty good. Okay. Three – artificial intelligence. This is a huge one. This is a real economic tailwind. Gosh, Nvidia stock was up over 200% in the last year, really driven by demand in AI, artificial intelligence. And it’s not just like companies selling chips. Let me give you an example. Walmart’s using it to manage inventory more efficiently.
And so you would think that they would look at artificial intelligence to gather information about buying powers and patterns, buying patterns in certain regions. So maybe people buy differently in New Hampshire than they do in Texas. And you would expect that, right? Like whether it’s winter clothes or cowboy hats, it’s just different. But now they’re getting really granular and they’re looking at different buying patterns in San Antonio, maybe even South San Antonio than, New Braunfels.
So, this artificial intelligence that Walmart’s adopting looks at weather patterns, search trends, local search trends, consumer behaviors. And they can predict if somebody’s, like if temperatures are going to be high, if people are going to buy pool floats and sunscreen. And that helps because then they’re not going to have to have like these massive markdowns or waste, they can get the full prices because there’s an appetite for those products and services.
So, if they can dial that in using artificial intelligence, their profit margins will go up and they’ll improve customer satisfaction because customers won’t be upset that what they want is not there. And so, this is like hyper local focused artificial intelligence that’s absolutely helping Walmart. In fact, the US, they do this same store sales.
So, it basically it’s not adding new stores to the calculation, but they were up last year because of just this artificial intelligence hitting the bottom line. JPMorgan Chase and a lot of banks are using artificial intelligence to help spot fraud in advance. And, but every industry, I mean, they’re using some degree, we are using artificial intelligence.
We’re using it on tax returns, estate planning documents, investment research, investment solutions like artificial intelligence is here. It’s not only reducing costs like we saw with Walmart but improving profitability. So, this is huge tailwind in the economy, okay. Number four – tariffs, got to talk tariffs. This is another element to the market and one that pessimists may latch on to.
I think there’s a story here to understand. And one of which is the reference to 2018 when the US and China had some tariffs. We forget about those tariffs with US – China, stocks dipped. But what happened they recovered later because companies just adjust their supply chains. They’re nimble. They’re thinking in advance. Apple and Tesla did this and you know firms like Caterpillar and John Deere are, you know, building regional manufacturing hubs to avoid tariffs.
And that’s what you want. You want these companies to come back, but even though tariffs may cause this short-term volatility, you know, long-term they haven’t been damaging. In fact, even the short-term stuff is starting to subside a little bit. There was this rhetoric in the marketplace called TACO. Did you hear this, TACO is called Trump Always Chickens Out.
And so it was, you know, the people that really hate Trump, they used to use this because they were saying Trump would talk about a tariff, talk about a hard deadline, and then chicken out. That’s what they said. And at the end, the Trump supporters would say, look, this is him negotiating in real time and in front of all of us not hiding.
And he’s going to be subject to second guessing. They don’t use TACO that much anymore. But, the point I want to make is that the variability in Trump’s negotiating, going back and forth, caused a lot of uncertainty and confusion and worry. Now, I will tell you, people are used to the confusion. It sounds kind of weird, but they’re less concerned about the back and forths and all that.
They better understand his style. And so, the market’s actually responding to that pretty well. And some people are even turning to, I mean, like not completely becoming Trump supporters. But if you look at Bill Maher, who completely hates, I don’t think he hates Trump, but he tends to really be anti-Trump. He has been, I know he doesn’t like Christians, which obviously bothers me a lot.
So, I don’t follow him. I only see clips. But he just recently said and this is, you know, credit to him. He said I was wrong to think that Trump tariffs would sink the economy. For him to say that I think is a message. And I see a lot of economists saying that. Doesn’t it, right now, it’s bringing in about $100 billion more into the country.
The question that the pessimists have is when does the inflation happen? When is the shrinkflation happen? And I guess we’ll, you know, it’s yet to be seen. But that’s the concern that pessimists have. But the reality is bringing a lot of money in. And it seems to be working pretty well. But there’s still a lot of, down the road, indirect consequences that will have to figure out.
Pessimists will latch onto that. But as of today, tariffs are working okay. The last one, let’s land this plane, deregulation. When I am sitting around and I’ve been in this situation before, when I’ve sat around a room with other leaders and we are talking about upcoming regulation and how to navigate through that, that’s a waste of time for me as a leader.
I want to think about growing. I want to think about solving problems that are real time customer related problems, spending time in a boardroom, on a board or whatever, thinking about the latest regulation and how we’re going to have to navigate through that is a complete misallocation of resources, of human capital, of human ingenuity, of thinking the compliance costs associated with it.
I hate it, I understand, look, a regulation is a basic example. I believe in seat belts. I understand that there’s a need for regulations. But we just went through a time period where it was burdensome, namely in the DEI space. We all saw it. The Good Neighbor plan is an example of that, that was rolled back.
It was an ozone air quality rule for light duty and medium vehicle trucks. I know we care about air quality. And as believers, I will also say this. I care about the air quality. I care about the water. I care about the dirt. I care about the animals. When I hunt deer or I fish, I pick up.
You know, I’m not saying I’m an angel here, but, I mean, I’ll pick up fishing line that I see. I’ll make sure that when I harvest the deer, I pray for the deer. You know, I really, the earth is a gift. And the Christians should own that. The problem that has happened is it’s become too burdensome and there is just overreach.
And I would pretty much argue with anybody in that regard, it was just way too much overreach. And so that’s all been rolled back, which really allowed a lot of companies to focus on the future, including the DEI programs. Those were burdensome just as well. I know there’s elements that make sense where we want to integrate a lot of other people and cultures into the economy, but the DEI programs were absolutely burdensome and really crossed the line.
Energy deregulation has really helped. Occidental Petroleum and Chevron just garner investment interest again and drill more freely. Regional banks, you know, some of the banking lending has loosened up a little bit, which is really good for everyone. I mean, when the labor rules relax a little bit, Caterpillar and Lockheed Martin can grow.
I mean, there’s just a lot of just impacts. And I wish some of the loosening of regulation would expand to Europe because Europe still has really burdensome ones. In fact, I’ll tell you this. If you have a company and you’re doing business in Europe, their environmental standards don’t apply just to the division that is doing business in Europe.
Those environmental standards that they have, they have to be adhered to, to the entire company, not just the division that’s working over there. So, Europe still has a long way to go. Hopefully they’ll learn something from the United States that really values innovation, flexibility, and not burdensome regulations. But at the same time, we absolutely want to make sure that we do the right thing.
And that does include, you know, wearing seatbelts and all the other regulatory things that protect us. Okay. So, man, that was a lot. This is like, man, if we can just I mean, if we can just get these five things moving in the right direction, we’re going to be like an economy, like, I guess, like, my daughter, when she was younger, she did the mutton busting, and I just want to see the economy take off like a child on a sheep doing the mutton busting.
And I think the probabilities again, I’m not, I don’t predict, but you just look at the probabilities. There’s, some really good things happening. By the way, all that said, there’s always something to worry about. Always. I’ve studied the markets. I’ve studied history. Not to say that I have a crystal ball. I’ve been doing this since ‘99.
I’ve had a lot of stuff going on. I’ve worried and I just at some point you just go. There’s always something to worry about. I’m going to trust in the Lord. I’m going to be rational. I’m going to use my brain, but I’m going to trust that the Lord is going to work it out. And that’s kind of where I sit.
I think. I tend to bet on optimism. If you don’t know me by now, that’s my angle. Thanks for listening to Retire in Texas. Be sure to stay grounded. Live generously. And remember, you think different when you think long term. Have a great day.
Resources:
https://www.morningstar.com/economy/job-growth-slowed-may-labor-market-remains-healthy-now
https://abcnews.go.com/Business/trumps-tariffs-achieved-experts-weigh/story?id=123859218
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