Jamie Dimon's Recession Fixation: Latest Warning Comes After Robust Jobs Data

Highly influential banker Jamie Dimon repeated his recession warning on Monday, saying that the US economy will tumble into doldrums in the next six to nine months. The JPMorgan CEO said the combination of volatile markets and disorderly financial conditions will usher in the inevitable crisis.

Dimon, however, said the US consumers will not suffer as much as they did during the 2008 financial crisis. He was speaking to CNBC at the JPM Techstars conference in London.

Jamie Dimon
Jamie Dimon YouTube Grab

Serious Stuff

"But you can't talk about the economy without talking about stuff in the future – and this is serious stuff ... These are very, very serious things which I think are likely to push the U.S. and the world – I mean, Europe is already in recession, and they're likely to put the U.S. in some kind of recession six to nine months from now," he said, Yahoo Finance reported.

Economists are divided on the chances of a US recession at this point, but Dimon appears to indulge in the dark theory, that too, all too often.

Economy Heading Into Hurricane

In June, Dimon said the US economy is heading into 'hurricane' triggered by the Ukraine war but aggravated by the inflation pressures and the Federal Reserve's rate hikes. "Right now it's kind of sunny, things are doing fine. Everyone thinks the Fed can handle this ... That hurricane is right out there down the road coming our way," Dimon said.

Another Warning in August

He also predicted a high-price scenario in the crude market, with oil prices going as far as to say that crude prices can spike as high as $150 to $175 a barrel. However, that scenario did not unfold, and even after the Opec+ announced a significant output reduction, prices haven't skyrocketed.

In August, Dimon said there was a 20% to 30% odds of "something worse" than a recession happening. He had once again repeated the theory that high interest rates, quantitative tightening, oil price volatility and the Ukraine war will certainly result in a US recession.

US Inflation
US Inflation PXhere

Again, in early September, Dimon said Europe is probably already going into a recession and that this will cause an upheaval in global markets. "One thing I can predict with certainty is volatility in the markets", he told CNBC-TV18.

US September Jobs Report

Dimon's latest warning on recession came immediately after the US September jobs report showed that hiring was happening at a brisk pace in the country and that unemployment was at a half-century low even as average pay increased. This does not exactly look like a perfect recipe for a recession.

US Dollar
US Dollar Pixabay

However, Dimon stresses on the fact that the rate hikes by the US Federal Reserve have cooled the economy while controlling inflation. Obviously the borrowing costs have gone up, impacting a wide swathe of customers. "But they're clearly catching up. They're clearly motivated to catch up," he said. "And, you know, from here, let's all wish him success and keep our fingers crossed that they managed to slow down the economy enough so that whatever it is, is mild – and it is possible," Dimon says.