Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

JPMorgan Forecast ‘Perilously Close' to a Recession

Economy Jul 01, 2022 02:10PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. JPMorgan Forecast ‘Perilously Close" to a Recession

By Sam Boughedda

JPMorgan (NYSE:JPM) analyst Michael Feroli said in a note Friday that softer economic data this week is leading the firm to revise its tracking of second-quarter annualized real GDP growth from 2.5% to 1%, and its projection for the third quarter from 2% to 1%.

"The recent trajectory for consumer spending indicates a significant loss in momentum through the middle of 2Q, and our Chase card data suggest spending growth remained sluggish in June," said Feroli. "We look for growth to modestly accelerate toward year-end, reaching 1.5% in 4Q on the back of stronger motor vehicle production and some purchasing power relief from more modest headline inflation."

The analyst said their forecast comes "perilously close" to a recession.

However, they believe the economy will expand, partly because they think employers may be reluctant to shed workers, even during a period of soft product demand.

"The fact that jobless claims have only modestly drifted higher in the first half—when output growth may have been about flat—is an encouraging signal about the resiliency of the labor market," added Feroli.

He concluded that the Fed's current outcome-based approach to inflation means near-term growth softness should not deter it from hiking aggressively in the second half of the year. "Whereas previously we saw upside risk to our terminal funds target range of 3.25%-3.5%, we now see some downside risk," he concluded.

JPMorgan Forecast ‘Perilously Close' to a Recession
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Alan Rice
Alan Rice Jul 01, 2022 5:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"The Peril" is "growth" (in the WRONG direction).
Samantha
Samantha Jul 01, 2022 2:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No widespread layoffs occurring or anticipated. Layoffs appear consolidated toward alt currency platforms, crypto mining equipment, TSLA and loan departments in financial  services. Consumer demand and growth are lowered, not dire or catastrophic.
Samantha
Samantha Jul 01, 2022 2:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
When hasn't inflation outpaced wage growth? I don’t like it either but how is that a leap to gulags? The far right frequently brings up the threat of communism and leftists but doesn’t support Ukraine’s fight against aggression. Ukrainians suffered under Stalin and in the decades to follow under Communist rule. As for JPMorgan’s analysts, the CEO has a history of self serving agendas. At this stage, I wouldn’t take his analysis or Musk’s literally. Regardless of circumstances, contraction follows overspending and unsustainable market valuations. For now inflation is more pressing. As long as deflation isn’t overdone, it doesn’t have to end badly.
Co Gonz
Co Gonz Jul 01, 2022 2:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Samantha it didnt with trump.. over 3% gdp and around 1.2-1.5 inflation
wireless beam
wireless beam Jul 01, 2022 2:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
second-quarter -2,1%
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email