JPMorgan chief executive Jamie Dimon offered a bearish outlook for the US economy on Tuesday after revised payroll data indicated it is facing a possible slowdown.
A preliminary report from the Bureau of Labour Statistics showed US employers added 911,000 fewer jobs than previously estimated in the year ending in March, further pointing to a stalling labour market.
Economists had expected a downwards revision heading into the report, although the data came on the higher side of the 550,000-950,000 jobs that were expected in a Goldman Sachs note on Sunday.
“The economy is weakening,” Mr Dimon told CNBC on Tuesday. “Whether that is on the way to recession or just weakening, I don’t know.”
The revision follows a string of economic data that pointed to a labour market stalling. The Labour Department report last week showed the economy added 22,000 jobs in August, which was below estimates.
Economists are also warning of an inflationary increase because of President Donald Trump's tariff agenda, with businesses probably passing along higher costs to consumers. The BLS is due to release its most recent inflation report on Thursday.
Fitch Ratings on Tuesday raised its global growth forecast to 2.4 per cent for 2025, slightly higher than its June forecast but a slowdown from 2.9 per cent growth last year, after announcements from the White House reduced some tariff uncertainty. The ratings agency at the same time lowered its growth outlook for the US from 1.6 per cent to 1.5 per cent.
“Greater clarity about US tariff hikes does not alter the fact that they are huge and will reduce global growth. And evidence of a slowdown in the US is now appearing in the hard data; it’s no longer just in the sentiment surveys,” Brian Coulton, chief economist at Fitch, said in a press release.
Concerns over the labour market are expected to weigh on the Federal Reserve when it meets for its next two-day policy meeting next week. Unlike other central banks, the Fed has a dual mandate of price stability and maximum employment.
Fed Chair Jerome Powell recently indicated that the US central bank could adjust rates, which have remained steady at about 4.3 per cent this year, to support the US labour market. Traders have also locked in a rate cut of at least 25 basis points next week, with some seeing a chance that the Fed could issue a cut of 50 basis points, according to CME Group data.
Mr Dimon said that while he believes the Fed will cut rates on September 17, the decision will not be of “consequence” to the economy.
