(Fortune) -- The economy has made a sharp U-turn in the past couple of months, and better days for American businesses and workers are around the corner.
But don't take my word for it. Take Warren Buffett's. And Jamie Dimon's. And Jack Welch's. All three tell me that in the past four to eight weeks, they've seen a real change in their businesses, and that indicates better news for the nation's economy. They should know.
Warren Buffett has been focusing on the data from BNSF Railway, which he recently acquired. At the start of the recession three years ago, Burlington Northern felt the pain early when retailers stopped ordering goods, automakers stopped shipping cars, and homebuilders stopped needing so much lumber. The railroad started storing thousands of idle railcars; now those cars are being called back into service. And that's an incredibly important sign.
But that's not his only hint.
Buffett's Berkshire Hathaway (BRKA, Fortune 500) conglomerate encompasses some 80 different businesses, and he's seeing strength everywhere: from the number of hours customers fly at NetJets to the amount (and cost) of jewelry they buy at Borsheim's.
But the most important place he's seeing it is at Iscar, an Israeli-based manufacturer of metalworking tools he bought in May 2006. Iscar's cutting tools are used on aircraft, auto, and other assembly lines, and the company's sales volume is popping. "You can just feel the pulse of industry quickening," Buffett says.
Jamie Dimon, whose J.P. Morgan Chase (JPM, Fortune 500) was the fortress that withstood the great financial disaster, counts millions of Americans as customers. And he's seeing a turn in the very recent data as well. After soaring to a record high of 9.3%, credit card charge-offs for the industry are dropping to more normal levels of 5% to 6%.
But his most important indicator may be the anecdotal evidence that a hiring boom is on the horizon. Dimon travels the country constantly for lunches or dinners with business leaders, meeting with groups of 20 to 250 people at a time. They may be people who run small or large businesses, they may be venture capital investors, they may be clients of the firm's massive private banking group.
But everywhere lately, the reaction is the same. When he asks how many of them are going to be hiring in the next 12 months, a third of the hands in the room go up. That's from virtually none a year ago. "The strength and resilience of the American economy may surprise people," Dimon says. "The odds of a potential upturn are stronger than people think."
And then there's Jack Welch, who spent 20 years at the helm of the nation's largest industrial conglomerate, General Electric (GE, Fortune 500). These days Welch is a special partner at private equity firm Clayton Dubilier & Rice, which has investments in everything from Hertz rental cars to TruGreen, a lawn service company.
He told Squawk Box recently that customers across the board are flooding back. "People who have jobs are now feeling more secure about keeping them and are therefore spending," Welch says. "And people who don't have jobs are becoming more hopeful as they see glimmers of hiring."
So if these business leaders are that confident, why are there still so many doubters out there? Americans are still reeling from the economic collapse, and some fret that another crisis is lurking. Call it a case of post-traumatic financial crisis syndrome.
"When fireworks go off now, people are expecting that it's a nuclear bomb," Buffett says. It's a natural reaction, but a dangerous one. That mentality exacted a painful cost for investors who followed their gut and got out of stocks as the Dow fell below 9000, then 8000, then 7000. Since then stocks have rebounded 65% off their lows. And if you were waiting on the sidelines until things looked more stable, then you missed the party.
It's a lesson to us all. While there are still plenty of concerns out there -- from a stubbornly high unemployment rate to continuing commercial real estate land mines -- I'll follow the lead of those on the economic frontlines. And I can't think of three better generals than Buffett, Dimon, and Welch.
|Bank of America Corp...||13.31||-0.13||-0.97%|
|General Electric Co||23.86||0.20||0.85%|
|Ford Motor Co||14.97||0.02||0.13%|
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