JPMorgan CEO Backs Down From Recession Warnings

That's some positive news.

JPMorgan Chase CEO Jamie Dimon certainly isn't one to mince words when it comes to economic warnings. The financial giant spent much of 2022 warning consumers to gear up for a recession. And last June, Dimon was quoted as telling investors to brace for an "economic hurricane."

But Dimon may be relaxing a bit when it comes to those recession warnings. And that's good news for consumers all around.

Things aren't looking quite as bleak

CNBC recently reported that Dimon's outlook on the economy isn't as dire as it was last year. “The U.S. economy right now is doing quite well," Dimon said. "Consumers have a lot of money. They're spending it. Jobs are plentiful."

Now that said, Dimon also acknowledged, "There's always uncertainty." But he followed up that sentiment with the statement, "That's a normal thing.”

In January, the national unemployment rate not only fell to pre-pandemic levels, but reached a 54-year low. That, combined with the fact that consumers still seem to be spending money, is encouraging for the economy.

That said, it's a good idea to prepare for the uncertainty Dimon alluded to. Things still have the potential to take a turn for the worse, especially if the Federal Reserve continues to fight inflation aggressively. If the Fed keeps raising interest rates, consumer spending could decline in a serious way. That could easily lead the way to a broad economic downturn.

How to prepare for a recession

One of the best steps consumers can take to gear up for a recession is to boost their emergency funds. At a minimum, having enough money in a savings account to cover three to six months of essential living expenses is crucial. But consumers who manage to save more buy themselves that much more protection in the face of job loss.

Consumers with high-interest credit card debt should also do what they can to try to shed it. Having that debt to contend with during a period of unemployment could be extremely taxing. 

Working on income diversity is another good way to prepare for an economic downturn. The gig economy is loaded with opportunities these days, so picking up a side job could help many people not only shore up their finances, but also, get to a place where they have some protection in case they're laid off from their main jobs.

And speaking of primary jobs, now's a great time to work on filling in knowledge gaps and boosting skills. While being a valued employee doesn't always mean avoiding a layoff, it's harder for companies to part with workers they consider essential to operations. So spending some time improving job skills could mean not landing on the chopping block.

It's encouraging to hear that Dimon has a more positive view of the U.S. economy now than he did a few months ago. But it's also a good thing for consumers to be vigilant, and to do what they can to prepare for things to potentially get worse.