So America’s banker Jamie Dimon of JPMorgan Chase believes the consumer is enjoying the best time in the last decade due to the savings from cheaper gas.
“The U.S. consumer is a huge winner,” Dimon, 59, said Tuesday at the bank’s annual investor day in New York. “The consumer balance sheet has almost never been in better shape.”
So let’s say for the moment Dimon is correct — although if he is using credit card usage as a barometer of spending he could be dead wrong, but more on that later.
The US consumer may realize a $700 a year savings in gas spending. That $700 will not drive — pun intended — an economy or grow the GDP by any great amount.
I would venture that instead of buying $10 in gas, many are just using the savings to buy more fuel. And that the savings is never really spent on other items.
Remember the US has a huge pool of workers who are employed in more than one part-time job, so miles traveled is larger than it was even five years ago.
That said, if you have lost 8% to 10% in your 401(k), then you’re not feeling so flush to spend on “wants.” Especially when you can barely afford your “needs.”
No this is not a great time for the consumer, it’s better, but when you have everyone on the monetary side of the US government pushing for a higher inflation rate — Dimon included — well the powers behind the scene are working against the US consumer.