Jamie Dimon thinks he knows why people are so gloomy about the economy
The bottom 20% of American earners have been left out of the economic boom, Jamie Dimon said.
Their incomes have hardly budged for 20 years, leading to societal problems, the JPMorgan CEO said.
People can't get mortgages or afford homes, and communities have been hit by more drug use and crime.
The US economy may be the envy of the world, but many Americans are deeply discontent. One reason is they've largely missed out on the boom times, Jamie Dimon says.
"The bottom 20% of America have not done particularly well over the last 20 years," the JPMorgan CEO told The Wall Street Journal this week. "Incomes barely went up."
He added: "Suicide, fentanyl, crime, inflation — there are a lot of negative effects. Some people can't get mortgages, can't buy their home."
Dimon likely meant that stagnant wages had fueled rates of depression, drug use, and crime as people felt they just couldn't get ahead.
That may be particularly true when they're paying more for food, energy, and housing because of inflation — and have higher monthly payments on their credit cards and cars because of higher interest rates.
Those painful issues have translated into widespread disillusionment with the US economy. A full 51% of respondents to a New York Times survey of registered voters in late February rated the economy as poor, and another 23% described it as only fair. Moreover, 40% or those surveyed said the economy was worse than a year earlier.
Economic growth has slowed from 3.4% in the fourth quarter of 2023 to 1.6% last quarter, official data showed this week. But a recession is yet to strike, unemployment remains historically low at under 4%, and inflation has dropped from more than 9% two summers ago to below 4% in recent months.
Record home prices and booming markets are often good news for homeowners with stock portfolios. But they don't benefit others to the same degree — and can even hurt them if rising house prices drive up rents and companies raise prices to bolster profits and boost shares.
"There's parts of society who's kind of struggling, parts of society who's not," Dimon said. "You can see why that has people upset."
The billionaire banker has also emphasized the situation isn't as rosy as many might think. He warned of stubborn inflation, interest rates staying higher for longer, and a recession — echoing comments he made in his annual letter, to analysts, and in recent interviews.
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