Economic Take

In the final episode of this podcast, Jim takes a look back at 50 years of economic transformation—and offers optimism about what the future holds for the economy and markets. If you're looking for more economic and market insights, subscribe to our weekly update or visit jpmorgan.com/cb. For your next podcast, consider the firm's new “Making Sense” series. 

Jim sits down with Kerry Jessani, Head of Healthcare, Higher Education and Nonprofit Banking for Commercial Banking, to explore the ways the current economic outlook affects colleges and universities, and even how technology has transformed the student experience.  

A sluggish recovery from economic crises worsens outcomes for the government, disrupts people's lives and erodes wealth. After a century of dealing with economic cycles, American leaders implicitly now understand the costs and benefits of policy activism.    

Though it's generating buzz, the May CPI report reflects the same patterns we've seen for months: that our inflation issues are supply-side problems and not a result of too much demand.  

In the big picture, there are no signs the economy is overheated. But the evidence plain to see in certain sectors, likely a result of consumer shifts away from services and toward goods during the pandemic. Added together, the odds of a Fed-triggered recession are pretty slim.  

Among a shifting market landscape, the interplay between monetary and financial conditions can be likened to that of conductors and musicians—one sets the tone while the other responds.

Stock market valuations have been high by historic norms, but is the standard way of valuing the stock market still applicable?    

Today's Federal Reserve has a few tools at its disposal it didn't have during the inflationary era of the 1970s: a game plan, time and flexibility.  

Despite the talk of inflation, bond investors still seem to agree with the Fed's initial instinct that many of the current price pressures will prove to be transitory. Also: Why globalism is still kicking.

The Fed worked hard to prop up the economy during the pandemic. There's no reason to assume its leaders are now willing to risk pushing the economy into a recession when long-term inflation expectations are still below 2%.

Many of us remember the price shocks of the 1970s, but there are not many parallels with that era in terms of the forces that currently drive inflation. Find more market, economic and business insights at jpmorgan.com/CB.  

There's a widespread notion that the current spike in prices signals an overheated economy. But under close inspection, those details don't add up.   

The Fed's activity now is a hallmark of its modern approach: Set investors' expectations for steady, predictable long-term inflation — and avoid the temptation to hit the brakes.

Employment has grown by 887,000 monthly on average since April 2020 as the economy got back on its feet. Now that we're back to pre-pandemic employment conditions, the pace of hiring will grind down very quickly.  

Will the Fed's game plan pull the rug from under the recovery? The roller-coaster ride over the past two years seems less influenced by the Fed and more by non-monetary factors.  

The Fed said last week it expects growth to settle down to a trend-like pace and that unemployment will stabilize. What explains all the concern out there where the Fed sees no issue?

Will the recent spike in gas prices and other commodities set back the post-pandemic economic recovery? There's good reason to think we'll be able to ride this one out.  

The economic numbers we talk about are seasonally adjusted, smoothing out the natural ups and downs of a calendar year so we get a clearer picture. But since the pandemic, it's getting tricker to tell what's a standard seasonal swing or a COVID curveball.

The current geopolitical crisis will slow growth by a couple percentage points. But the drag caused by rising energy prices will be heaviest for regions of the globe that depend on imported fuel.

Concerns that rising labor costs could be inflationary are misplaced because wages move in concert with other factors—many of them decades in the making.    

The Federal Reserve has clearly communicated its goals for months. So why hasn't it changed course in the face of the latest inflation readings?

A peculiar thing happened in January's jobs report. The labor force grew by 1.4 million, but after an annual population adjustment, the labor force actually contracted. Why does BLS change the measurements, and how does that affect the way we look at trends?  

The upcoming rise in interest rates has the markets unsettled. But the Federal Reserve's plans are colored by a bullish view of the economy's growth, not a hawkish outlook wary of an economic downturn.    

With the Fed already starting to pull back from pandemic supports, interest rates are expected to climb in 2022. While that may dampen mortgages, enough other changes over the past few years should leave housing in a healthy place. 

When it comes to inflation, it takes two to tango—aggregate demand and aggregate supply. Comparing prices to the pre-pandemic world of 2019 tells a remarkably different story than a one-year lookback. 

In our 2022 Business Leaders Outlook survey, we found that business leaders across the U.S. have a rosy view of the year ahead. While pandemic-driven challenges linger, they're not really getting in the way of growth and profits.

It may not feel like it with the market trending down in the last month, but in 2021 we witnessed a remarkably fast economic recovery. And there's good reason to be upbeat for 2022.

The economy is expected to grow steadily in 2022, but there are a few reasons that shouldn't worsen current pricing pressures.    

The Fed's ultimate goal of stable inflation requires aggregate demand to align with aggregate supply. That hinges on the supply of labor, and unemployment is the best measure of that alignment.

Even though we know the culprit behind inflation, we're still susceptible to superstition. We tend to link inflation headlines with monetary and fiscal policy actions. Jim debunks a few popular misconceptions about recent Fed activity.

The air travel industry never shut down during the pandemic, but it certainly felt the effects. Airline trends offer us fast insight into business travel and tourism patterns. As COVID-19 cases dip and passenger counts rise, it looks like smoother skies are ahead.  

Though the Federal Reserve keeps an eye on asset prices, it won't set targets. That's because mandates on inflation and employment mean the Fed's plate is plenty full.  Plus, a look at historical norms and why they may not apply to modern asset  valuations. We want to hear from you! We're looking to learn more about listeners of Economic Take to improve and evolve the podcast. jpmorgan.surveymonkey.com/r/economictake  

Jim is joined by J.P. Morgan healthcare expert Lauren Ruane to discuss trends in the healthcare sector and what's changed in the pandemic. Key themes include how technology and innovation are shaping the sector's future. Lauren also covers patients as savvy consumers, remote care and behavioral health taking center stage, and why the sector's labor shortage is likely to intensify.

Though they're both climbing, price increases on materials are outpacing hikes on retail shelves. That's partially because labor costs matter more when it comes to consumer prices. We want to hear from you! We're looking to learn more about listeners of Economic Take to improve and evolve the podcast. jpmorgan.surveymonkey.com/r/economictake 

The Fed is focusing on the average rate of inflation over time, rather than responding to current volatility and price pressures. Why is this change a big deal? It can help lessen policy uncertainty, and it sets a more reasonable standard to judge the central bank's intentions. The change may also bring an end to the decline in the nominal interest rate levels that has weakened central banks' policy tools. We want to hear from you! We're looking to learn more about listeners of Economic Take to improve and evolve the podcast. jpmorgan.surveymonkey.com/r/economictake

Consumer sentiment is in a rut since this summer—and that can help us forecast future trends in the U.S. With some added historical perspective, consumers right now have it pretty good. We want to hear from you! We're looking to learn more about listeners of Economic Take to improve and evolve the podcast. jpmorgan.surveymonkey.com/r/economictake

What we're anticipating from the Fed for the next few years isn't monetary tightening, but a gradual easing of monetary accommodation. And a few good reasons to downplay a slim September jobs report. We want to hear from you! We're looking to learn more about listeners of Economic Take to improve and evolve the podcast. jpmorgan.surveymonkey.com/r/economictake  

October's jobs report and profit reports will tell us plenty about the momentum in the market. And a rise in mortgage rates from their pandemic lows could be a boost for landlords. We want to hear from you! We're looking to learn more about listeners of Economic Take to improve and evolve the podcast. It's just six short questions: jpmorgan.surveymonkey.com/r/economictake  

As the economy rebounds, the Fed's not budging — a clear sign of the Fed's rethinking since a decade ago. Also, a look at why air travel numbers are a signal for the broader economy.  

This year's surge in housing prices doesn't have much in common with the crisis from a decade ago. Behind it is a positive change in household buying power driven by lower mortgage rates and higher incomes.  

Small businesses saw both the challenges and opportunities of economic upheaval the last year. Chase for Business joined the Economic Take podcast to unpack how the economy and labor shortages are impacting small businesses—and how entrepreneurs are adapting.  

GDP is back to pre-pandemic levels, the economy is still short millions of jobs and businesses are struggling to fill job openings. The gap between national output and employment could lead to a few different scenarios, and each one looks different for growth and Fed policy in the years ahead.  

The value of the U.S. stock market now is twice the size of the U.S. economy. What macroeconomic factors led to the market's record highs, and what's on the horizon?

Businesses finally took a long-needed leap toward automation. (It was a global pandemic that provided the shove.)      

By focusing on the core and not the more volatile sectors like food and energy, the Fed gets a steadier look at the big economic picture. Still, economists are gravitating toward other gauges of inflation.  

Even with the economy rebounding, nonfarm employment is still several million below of its pre-pandemic mark. Schools and restaurants account for a big share, but signs point in the right direction.

The second-quarter GDP report reveals the culprit behind inventory shortages: A rare divergence between final demand and production. Jim explains how the situation will probably ease.  

Inflation readings and price pressures all point toward pandemic bottlenecks. That's why the Fed's “transitory” explanation is the right idea.

A JPMorgan Chase survey of mid-sized businesses suggests leaders are confident as companies bounce back from the pandemic. They also give insight into how they navigated the last year, and, perhaps more importantly, how they plan to take on the next challenges and opportunities.  

We're moving around again, and that's giving a lift to industries slowed by the pandemic. Jim explains how the energy and aviation sectors offer a glimpse at what's ahead.

The nation's GDP has just about recovered to pre-pandemic levels. So why isn't the job market catching up? Jim explains why the economy's going to have to grow much faster to hit Fed targets.