JPMorgan’s record profit signals the US economy is just fine, thank you very much

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Image: Reuters/Mike Segar
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JPMorgan Chase churned out record revenue and profit for the first three months of the year, defying analysts who were expecting a wobbly first quarter. The biggest US bank’s surprisingly buoyant figures, the first major release of earnings season, signal that performance from corporate America could be more robust than expected.

The Wall Street bank said profit increased by 5%, to $9.2 billion, well ahead of analyst expectations. Revenue rose by 5%, to $29.9 billion, also topping expectations. In premarket trading, the better-than-expected result pushed up JPMorgan’s shares by nearly 3%

“Even amid some global geopolitical uncertainty, the US economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong,” JPMorgan CEO Jamie Dimon said in a statement.

The performance by JPMorgan, a bellwether for the broader economy, suggests the US is still motoring along, even as the boost from last year’s tax cuts fades, and as global markets are whipsawed by Britain’s (ongoing) divorce from the EU as well as the US trade war with China. Wells Fargo also reported better-than-expected earnings today.

JPMorgan got a pick-me-up from higher interest rates, as the Federal Reserve hiked its borrowing benchmark late last year. The bank said its net interest income—what it makes on lending minus what it pays out on deposits—rose 8%, to $14.6 billion, mainly because of “higher rates.” This tailwind could fade, as the US central bank indicated last month that it’s unlikely to hike further in 2019.

Things could still get choppy, but today’s results show the country’s big banks are still steaming ahead.