Is the US Economy Crashing? JPMorgan Gives Out Warnings

The United States economy may still appear stable on the surface, but according to analysts at JPMorgan, troubling signs are beginning to emerge beneath the headlines. 

While recent job reports suggest growth and resilience, some economists are warning that these figures may not fully reflect the current economic reality. 

In particular, JPMorgan’s chief global strategist, David Kelly, believes that the country is quietly entering a slowdown that many are not yet recognizing.

This cautious outlook comes despite the Labor Department reporting the addition of 139,000 jobs in May and an unchanged unemployment rate of 4.2 percent. 

However, revised figures from previous months and a deeper look into labor force data suggest that the story may not be as encouraging as it first appears.

Job Numbers: A Closer Look Behind the Headlines

Although the May job numbers beat analyst expectations, Kelly warns that these headline figures can be misleading. He points to significant downward revisions in the March and April employment data, which erased a total of 95,000 jobs previously thought to be gained.

Even more concerning is the data from the Household Survey, which recorded a loss of over 600,000 jobs in May alone. 

While this measure is known to be more volatile, it remains a signal that should not be ignored. If these figures are accurate, they suggest that the labor market is weaker than it seems.

Kelly explains that on average, the US has only added about 124,000 jobs per month so far in 2025, compared to an average of 168,000 per month in 2024. This decline in job growth is one of several indicators pointing toward a gradual economic slowdown.

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Labor Force Shrinks Amid Economic Uncertainty

Adding to these concerns, data from Pennsylvania-based PNC Bank reveals a drop of 625,000 in the number of adults either working or actively seeking work in May. 

This contraction in the labor force almost cancels out the number of jobs added during the same period.

Economists at PNC suggest that this trend could reflect growing discouragement among potential workers. Fewer people participating in the labor market can signal a lack of confidence in job opportunities or future economic conditions. 

If this continues, it may weigh heavily on overall productivity and consumer spending in the months ahead.

JPMorgan Sees Slowdown Spreading Across Sectors

According to Kelly, the US economy is not slowing down all at once, but rather in a gradual and uneven way. He describes it as “seeping up and spreading” across different sectors. 

In his view, the problem is that most people focus only on headline numbers such as payroll growth or gross domestic product, while ignoring the subtle shifts happening underneath.

From trade balances to consumer behavior, several aspects of the economy show signs of losing momentum. The slowdown may not be drastic, but it could become more visible in the second half of the year if current trends continue.

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The Broader Implications

JPMorgan’s analysis suggests that the US economy may be entering a more cautious phase. Although no official recession has been declared, the combination of softening job trends, shrinking labor participation, and downward revisions to past employment data points to reduced momentum. 

If the slowdown continues, it could influence decisions made by the Federal Reserve regarding interest rates and economic support.

The economic picture is further complicated by uncertain global conditions, ongoing inflation concerns, and shifts in consumer spending. All of these factors will shape how the US economy evolves in the second half of the year.

For now, JPMorgan is encouraging investors and policymakers to look beyond surface-level data and examine the full range of economic indicators before drawing conclusions.

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Frequently Asked Questions (FAQ)

Q: Is J.P. Morgan a big 4? 

A: Yes, JPMorgan Chase is considered one of the "big four banks" in the United States, along with Bank of America, Wells Fargo, and Citibank.

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A: J.P. Morgan is a marketing name used for the investment businesses of JPMorgan Chase & Co. and its worldwide subsidiaries and affiliates. So, J.P. Morgan is part of the larger JPMorgan Chase & Co.

Q: What is J.P. Morgan famous for? 

A: J.P. Morgan is famous for helping stabilize railroad rates and reducing chaotic competition in the East. He gained control of a large portion of railroad stock he reorganized, becoming one of the most powerful railroad magnates, controlling about 5,000 miles of American railroads by 1902.

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A: J.P. Morgan scored higher than PwC in several areas, including overall rating, culture and values, work-life balance, senior management, compensation and benefits, CEO approval, recommendation to a friend, and positive business outlook.

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A: JPMorgan's revenue streams are more diverse than Goldman Sachs, which relies more on market-making. JPMorgan also has more than three times the assets and generates over three times the net revenue compared to Goldman Sachs.

Q: Who is the CEO of J.P. Morgan? 

A: Jamie Dimon has been the chairman and chief executive officer (CEO) of JPMorgan Chase since 2006.