PROVIDENCE, R.I. (WPRI) — The nation’s economy isn’t in a recession right now thanks to the underlying strength of the job market and consumer spending, but the risk of a downturn remains, according to the leader of America’s largest bank.
JPMorgan Chase Chairman and CEO Jamie Dimon offered his assessment after a government report released last week showed the country’s gross domestic product shrank for the second straight quarter, fitting a common definition of a recession.
“If it is a recession, it’s not what I call a ‘normal recession,'” Dimon told 12 News during an exclusive interview Thursday. “It doesn’t mean we won’t have a real one down the road. But I wouldn’t call this a ‘normal’ recession right now.”
Dimon argued too many commentators are too focused on a yes-or-no view of whether there’s a recession, and noted that economic indicators are “highly distorted” at present by both the COVID-19 and the high inflation rate.
“I hate this binary thing about a recession,” Dimon said. “Jobs are plentiful, people are spending money, people are still going back to work — it’s hard to call that a recession.”
“Right now, if you look at the economy today, it’s kind of strong,” he added. “People are spending 10% more than last year, even though it’s eroded a lot by inflation. … They still have a lot of money in their checking accounts, and while it’s diminishing, they’re still spending and they’re still going out to lunch and dinner and travel and things like that.”
With inflation at a four-decade high, Dimon said he thinks all the causes frequently cited are contributing to the problem: loose monetary policy by the Fed, big spending by Congress, pandemic-related supply chain issues, and disruption caused by foreign crises like the war in Ukraine.
“I guess we are all hoping the Fed pulls off a ‘soft landing,'” Dimon said, using a phrase central bank officials have employed to describe their efforts to cool the economy without pushing it into a downturn. “I wouldn’t count on it. But I’m still hoping for it.”
Dimon — clad in a golf shirt rather than suit and tie — made a short trip to Providence on Wednesday to meet with clients and visit a sleek new Chase branch in Olneyville that opened late last year, part of the bank’s expansion into Southern New England.
Chase opened its first Rhode Island branch in June 2019 on Thayer Street in Providence, and since then has grown to 11 branches statewide, with plans to add nine more by 2025.
“We’re expanding in Providence,” Dimon said, adding that the bank hopes to build on existing customer relationships it has with local residents who hold Chase credit cards.
Chase still has a long way to go to catch up with rival big banks that have long histories in Rhode Island. FDIC data shows Citizens Bank and Bank of America have a combined 60% of all deposits in the state, while Chase has less than 1%.
Asked how big Chase hopes to get in Rhode Island, Dimon laughed and said, “Well, we don’t come here to do 1% or 2%.”
“I’m not going to tell you exactly what the plans are, but I think our vision is much higher than that,” he said, adding, “That share will be going up every year probably for, hopefully, the rest of my life.”
Dimon also said Chase believes its investment in new brick-and-mortar branches is money well spent, despite how much banking activity has moved online in recent years.
“I think every day 800,000 people visit our branches — they need to, they want to,” he said. “I call it: they want to visit their money. They want to sit down with the banker sometimes.”
“Over time the branches have changed,” he said. “There’s a lot less of what I call operational, like, transactions and tellers — so fewer tellers, more advisers — and it works.”
Watch Jamie Dimon’s full interview with 12 News on next week’s edition of Newsmakers.
Ted Nesi (firstname.lastname@example.org) is a Target 12 investigative reporter and 12 News politics/business editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter and Facebook