JPMorgan, a bell weather bank in the US, reported that earnings declined for Q3 2024. JPM in its earnings release noted that, “The US economy remains strong for both consumers and big companies”. The bank highlighted several positive trends: consumers continue to spend, big businesses are confident, and new job creation remains strong. Ironically in the Wall Street Journal right below the JPM earnings announcement, there was an article about Boeing cutting 17K workers.  JPMorgan’s positive outlook may be a bit rosy. The truth about the economy is probably somewhere in between.

Consumer Spending:

Consumer spending has been strong, but the real question is are consumers spending more and getting less and even more importantly, where are they getting the money from? Home equity loans increased $4B in Q3 2024 which was the ninth consecutive quarter of increases. Credit card balances are currently totaling $1.1 trillion and in the most recent quarter rose $27B. Auto loans increased $10B to 1.6T. No matter how you slice it, the consumers balance sheet is weakening with higher debt levels, lower cash reserves and in some areas declining home values.