Jamie Dimon Of JPMorgan Summarised U.S. Economy In One Paragraph — Not Looking Good

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

As Dimon said, the labor market seems to be in solid footing. Last month, the U.S. economy added 372,000 jobs, topping a Dow Jones estimate of 250,000. Meanwhile, average hourly wages grew last month at 5.1% year-over-year pace.

However, the good news may end there.


The bad
The consumer price index — a widely followed measure of inflation — rose last month by 9.1% from the year-earlier period. That topped a Dow Jones forecast of 8.8% and market the fastest pace for inflation going back to 1981.

A big driver for that increase is a surge in energy prices. West Texas Intermediate, the U.S. oil benchmark, is up more than 28% in 2022, as the war between Ukraine and Russia raises concern over already tight supply in the market.

Higher prices have also dented U.S. consumer sentiment. The University of Michigan’s consumer sentiment index hit a record low last month, tumbling to 50.

These inflationary pressures have pushed the Federal Reserve to tighten monetary policy this year more quickly than investors anticipated. Last month, the central bank hiked rates by 0.75 percentage point, and some economists on Wall Street expect the Fed to hike by as much as a full point later in July.

Inflation has also had massive political ramifications in the U.S.

According to a poll conducted by the Pew Research Center, President Joe Biden’s approval rating has slumped to 37% — with a majority of Americans saying his policies have made the economy worse. Pew also found that just 13% of Americans rate U.S. economic conditions as “excellent/good.”

Dimon’s remarks follow comments he made last month in which he warned investors to brace themselves for an economic “hurricane.”

SOURCE: CNBC
IMAGE SOURCE: PIXABAY