JPMorgan Chase CEO Jamie Dimon says post-pandemic economic boom "could extend well into 2023"
America's best-known banker thinks the U.S. economy is set to take off as the coronavirus abates. JPMorgan Chase CEO Jamie Dimon predicts in his annual letter to shareholders that widespread vaccinations, coupled with more government spending and business reopenings, could propel the recovery for several years.
"[W]ith excess savings, new stimulus savings, huge deficit spending, more [quantitative easing by the Federal Reserve], a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom. This boom could easily run into 2023 because all the spending could extend well into 2023," Dimon wrote in the letter released Wednesday.
Consumers are likely to lead the American resurgence, according to Dimon. An infusion of government cash in the form of unemployment benefits and economic relief payments helped boost the personal savings rate to levels not seen since the 1970s, according to U.S. Commerce Department data. Even before the most recent round of stimulus checks went out, Americans had about $2 trillion saved up, Dimon estimated.
Once vaccines are widespread and more businesses reopen, a large chunk of those savings are likely to be spent on consumer goods and experiences outside the home, which should lead to yet more growth, experts agree. Economists at the Federal Reserve expect U.S. economic growth to reach 6.5% this year, which would be the fastest rate of expansion since 1984.
That burst of economic activity could last several years if recent federal spending proposals become law, such as President Joe Biden's bid to upgrade the nation's airports, railways and roads, Dimon noted.
Tax the rich
The CEO of the country's largest bank also expressed support for increased taxes on the wealthy for priorities such as infrastructure and education spending.
"If the wealthy paid more in taxes and the money was put to good use, they would be the main beneficiaries of a stronger economy," said Dimon, whose net worth is estimated at $1.8 billion.
Dimon called for a range of policies to make it easier for people to get and keep work, including expanding child care options, opening jobs to formerly incarcerated people and eliminating college-degree requirements for jobs that don't need the higher education credentials companies demand in their hiring process.
He also called for an increase in the federal minimum wage, noting that a family of four would need to make about $68,000 a year on average to reach a "living wage" level.
"With two adults working full time, each would need to earn $16.50 an hour to reach that level," Dimon wrote.