Dimon’s Bloomberg interview
According to Dimon, the US economy is doing well in the current scenario, and he believes that the economy is strong. Various macroeconomic factors have been improving gradually, which is strengthening economic growth. Dimon said, “America looks pretty good. . .It looks like this [economic growth] may have legs to go. Maybe a year, maybe two, maybe more.”
Factors supporting growth
The labor market has been improving significantly in recent months. Wage growth is also gradually picking up in the economy (SPY), signaling that consumer activity should also speed up. On the other hand, the Federal Reserve has started its balance sheet normalization process. The decreasing leverage level in the financial market is a positive sign for the economy (DIA).
Dimon also pointed out a shortage of housing supply (QQQ), which could drive economic growth at a higher rate. He also pointed out that not only the United States but also Asia and Europe (VGK) are experiencing improving economic growth. This synchronized global growth is a positive sign according to Dimon’s optimistic view.
The US economy posted an annualized growth rate of 2.3% in 1Q18 compared to its growth rate of 2.9% in 4Q17. Iconic investor Warren Buffett also said recently that the US economy could grow at more than a 2% rate in the upcoming quarters, as consumers are going to realize the effects of tax reform on their incomes.
In the next part of this series, we’ll analyze Dimon’s view on the recession.