JPMorgan Chase (Swiss: JPM.SW – news) chief executive Jamie Dimon said Thursday the US economy looks “pretty good” and growth, though slowing, would not end up in recession.
“We’re not forecasting a recession,” Dimon said in a conference call with analysts after the bank reported fourth-quarter earnings that topped expectations.
He cited economic growth of about 2.0 to 2.5 percent in the past two years, coupled with the creation of five million jobs.
“We think the US economy looks pretty good at this point,” Dimon said, adding that he expects broader US credit quality to deteriorate beyond the downturn seen in the oil sector amid falling crude-oil prices.
Credit quality throughout the broader economy “is as good it’s ever been,” Dimon said. “Obviously it’s going to get worse.”
“If you have a recession, you will see a normal cyclical increase in all those losses,” Dimon said.
Dimon’s comments came after the biggest US bank by assets reported that fourth-quarter earnings rose 10.2 percent from a year ago to $ 5.4 billion.
But earnings were dented somewhat by an increase in reserves in case of loan defaults following the bank’s downgrades of $ 124 million in its oil and gas portfolio and $ 35 million in metals and mining.
Dimon said he remained hopeful, despite worries about the weakening oil sector and the impact from China’s slowing economy.
“When you have commodity prices go down like that there are big winners and losers. The oil companies are the losers. Consumers get the benefit,” Dimon said.
“Hopefully this will all settle down,” he said. “It (Other OTC: ITGL – news) ‘s not the beginning of something really bad.”
