JPMorgan CEO Dimon summarize U.S. economy in one paragraph– and it sounds bad

0
532
JPMorgan CEO Dimon sums up U.S. economy in one paragraph — and it sounds bad

Revealed: The Secrets our Clients Used to Earn $3 Billion

Jamie Dimon, ceo of JPMorgan Chase & & Co.

Christophe Morin|Bloomberg|Getty Images

JPMorgan Chase CEO Jamie Dimon on Thursday summed up the state of the U.S. economy in one paragraph, and it’s not all excellent.

On the one hand, Dimon stated the U.S. “economy continues to grow and both the job market and consumer spending, and their ability to spend, remain healthy.”

He then rattled off a variety of indication, stating: “But geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity, combined with the war in Ukraine and its harmful effect on global energy and food prices are very likely to have negative consequences on the global economy sometime down the road.”

Dimon’s remarks, which were made in JPMorgan Chase’s most current quarterly release, come as financiers and financial experts attempt to construct whether the economy is headed for an economic crisis– and the current wave of financial information isn’t offering much clearness.

The excellent

For the minute, there aren’t any indications the U.S. economy is getting in an economic crisis, according to remarks JPMorgan executives made on their profits call.

As Dimon stated, the labor market appears to be in strong footing. Last month, the U.S. economy included 372,000 tasks, topping a Dow Jones quote of 250,000 Meanwhile, typical per hour incomes grew last month at 5.1% year-over-year rate.

Consumer costs likewise appears to be downing along, albeit at a controlled rate. Spending in May increased 0.2%, listed below a Reuters quote for a 0.4% gain.

Even within JPMorgan’s own company there were indications of customer strength. Consumers are still investing in discretionary locations like travel and dining. At its customer and neighborhood banking department, integrated debit and charge card costs was up 15% in the 2nd quarter. Card loans were up 16% with continued strong brand-new account originations.

However, fortunately might end there.

The bad

The customer cost index– a commonly followed step of inflation– increased last month by 9.1% from the year-earlier duration. That topped a Dow Jones projection of 8.8% and market the fastest rate for inflation returning to 1981.

A huge chauffeur for that boost is a rise in energy rates. West Texas Intermediate, the U.S. oil criteria, is up more than 28% in in 2022, as the war in between Ukraine and Russia raises issue over currently tight supply in the market.

Higher rates have likewise dinged up U.S. customer belief. The University of Michigan’s customer belief index struck a record low last month, toppling to 50.

These inflationary pressures have actually pressed the Federal Reserve to tighten up financial policy this year quicker than financiers prepared for. Last month, the reserve bank treked rates by 0.75 portion point, and some financial experts on Wall Street anticipate the Fed to trek by as much as a complete point later on in July.

Inflation has likewise had enormous political implications in the U.S.

According to a survey performed by the Pew Research Center, President Joe Biden’s approval ranking has actually dropped to 37%– with a bulk of Americans stating his policies have actually made the economy even worse. Pew likewise discovered that simply 13% of Americans rate U.S. financial conditions as “excellent/good.”

Dimon’s remarks follow remarks he made last month in which he cautioned financiers to brace themselves for a financial “hurricane.”

Subscribe to CNBC PRO for unique insights and analysis, and live company day programs from worldwide.