JPMorgan's Jamie Dimon says we've been 'spending like drunken sailors,' and that's a big risk to the economy

• JPMorgan's Jamie Dimon warned of risks to the still-resilient US economy.
• "We've been spending money like drunken sailors around the world, this war in Ukraine is still going on," he said.

JPMorgan CEO Jamie Dimon has once again sounded caution over a resilient US economy, which has remained so despite the Federal Reserve's relentless rate hike cycle.

"I just think people make a mistake to look at real-time numbers and not look at the future. And the future has quantitative tightening," Dimon said at an industry conference on Monday. He was referring to policies that drain liquidity from the market.

"We've been spending money like drunken sailors around the world, this war in Ukraine is still going on. Those are really big buts. To say the consumer is strong today, meaning you got to have a booming environment for years is a huge mistake," Dimon said.

American spending has been bolstered by ballooning asset prices, rising wages, and COVID-era savings — but this stash may be falling and "normalizing," he added.

Indeed, researchers at the Federal Reserve Bank of San Francisco wrote in an August 16 post they expect consumer savings from the pandemic era to run out in the current third quarter.

Dimon's warning about the economy echoes similar views by prominent observers, including top economist David Rosenberg, who said in early August that the Fed's aggressive rate hikes and the resumption of student-loan payments next month could contribute to a consumer-led recession.

A Bloomberg survey of investors conducted last week also showed that more than half of the respondents said they think personal consumption could shrink in early 2024.

Since consumer spending accounts for about 70% of the US economy, any changes to the measure are a big deal.

After all, the resilience of the US consumer has kept the economy going even amid the Federal Reserve's relentless rate hike cycle since March last year. The US real gross domestic product, or real GDP, grew at an annualized rate of 2.4% in the second quarter of 2023, according to the Bureau of Economic Analysis — a strong beat over Wall Street's 1.8% growth forecast.

JPMorgan did not immediately respond to a request for comment from Insider sent outside regular business hours.