JPMorgan’s Jamie Dimon predicts strong growth in 2022

JPMorgan Chase CEO Jamie Dimon provided a bullish outlook for the US economy in 2022, arguing Monday that strong consumer spending will drive growth in the months ahead.

While Dimon acknowledged that some Americans are still contending with difficult economic conditions, he insisted the underlying economy is strong and that the consumer balance sheet “has never been in better shape.”

“They’re spending 25 percent more today than pre-COVID. They’ve got $2 trillion in their checking accounts.” Dimon told CNBC. “Their debt-service ratio is better than it’s been since we’ve been keeping records for 50 years. Home prices are up, stock prices are up, jobs are plentiful, wages are going up, and that all tells you what’s going to happen in the future.”

Dimon gave his confident outlook for the year ahead despite mounting concerns about the impact of inflation, which is expected to hit a four-decade high when the latest consumer price index data is released on Wednesday.

In December, the US economy added just 199,000 jobs, a number that came in well below expectations, even as the unemployment rate declined to just 3.9 percent.

The JP Morgan Chase chief said his view is that the “herky-jerky” numbers won’t derail the economy.

“We’re going to have the best growth year we’ve ever had this year, I think, since maybe sometime after the Great Depression,” Dimon said. “Next year will be pretty good, too. Obviously there are some negatives out there, but those things look pretty good.”

The Federal Reserve has indicated it plans to raise interest rates faster than expected given tight labor conditions and the inflation surge. The hawkish outlook rattled the market in recent days.

Earlier this week, Goldman Sachs told investors it expects the central bank to hike rates four times in 2022, up from its previous estimate of three increases.

Dimon said he expects “a lot of volatility” in the markets as the Fed pursues plans to hike interest rates and dial back pandemic-era economic support. The bank executive said he would be “surprised” if the central bank stopped with four hikes, though he expressed hope the Fed can achieve a “soft landing.”

“It’s possible that inflation is worse than they think and they raise rates more than people think,” Dimon said. “I personally would be surprised if it’s just four increases next year. I think four increases of 25 basis points is a very little amount and very easy for the economy to absorb.”