JPMorgan Chase (NYSE: JPM) is currently the largest bank in the USA by total assets. Because of this status, JPMorgan is naturally able to feel the pulse of the country’s economy. The bank’s latest earnings conference call – for the second quarter of 2025 – was held last week and contained useful insights on the state of American consumers and businesses. The bottom-line is this: the US economy remains resilient, but significant risks persist
What’s shown between the two horizontal lines below are quotes from JPMorgan’s management team that I picked up from the call.
1. The US economy remained resilient in 2025 Q2 but significant risks persist
The U.S. economy remained resilient in the quarter. The finalization of tax reform and potential deregulation are positive for the economic outlook, however, significant risks persist – including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices.
2. Net charge-offs for the whole bank (effectively bad loans that JPMorgan can’t recover) rose from US$2.2 billion a year ago; Consumer & Community Banking’s net charge-offs was relatively flat compared to a year ago
Credit costs were $2.8 billion, with net charge-offs of $2.4 billion, and a net reserve build of $439 million…
…Now let’s go to our businesses, starting with CCB…
…Credit costs were $2.1 billion, reflecting net charge-offs of $2.1 billion, relatively flat year-on-year, in line with expectations.
3. JPMorgan’s credit card outstanding loans was up 9% year-on-year in 2025 Q2
Card outstandings were up 9% due to strong new card acquisition.
4. Auto originations were up year-on-year
In Auto originations were up 5%, driven by higher lease volumes.
6. JPMorgan’s investment banking fees had good growth in 2025 Q2, with growth in debt underwriting fees but a decline in equity underwriting fees; management sees a robust pipeline for capital markets activities among companies and the outlook is upbeat, but they’re also aware that sentiment can change in a heartbeat
IB fees were up 7% year-on-year. We continue to rank #1 with wallet share of 8.9%. In advisory fees were up 8%, benefiting from increased sponsor activity. Debt underwriting fees were up 12%, primarily driven by a few large deals. In equity underwriting fees were down 6% year-on-year. Our pipeline remains robust, and the outlook along with the market tone and sentiment is notably more upbeat…
…You’ve seen how rapidly pipelines can grow and shrink. And so that lesson we’ve learned over and over, it may stay wide open for 1.5 years. Something may happen geopolitically that all of a sudden that pipeline slows a little bit. And so I’m always a little cautious to guess what that’s going to be.
7. Management continues to expect credit card net charge-offs for 2025 to be around 3.6%
On credit, we continue to expect the Card net charge-off rate to be approximately 3.6%.
8. The consumer looks fine to management given the low unemployment rate, although there is a little it more stress in lower income consumers compared to higher income consumers
[Question] If you can expand that into the consumer, any areas of stress from a credit quality perspective that you’re beginning to get more concerned today versus 3 or 6 months ago?
[Answer] We look at it very closely. It obviously matters a lot for us as a company. But we continue to struggle to see signs of weakness. We just — the consumer basically seems to be fine. Now a few things are true. Like if you look at indicators of stress, not surprisingly, you see a little bit more stress in the lower income bands than you see in the higher income bands. But that’s always true. That’s pretty much definitionally true. And nothing there is out of line with our expectations. Our delinquency rates are also in line with expectations. You saw that we kept our net charge-off guidance unchanged. So all that looks kind of fine. And to be honest, as we’ve said before, fundamentally, while there are nuances around the edges, consumer credit is primarily about labor markets. And in a world with 4.1% unemployment rate, it’s just going to be hard, especially in our portfolio to see a lot of weakness.
9. JPMorgan experienced a jump in non-accrual loans within consumer lending, but that is because of forbearance related to wildfires in the Los Angeles area, and the actual loss expectation is de minimis
[Question] In terms of the NPAs, the nonaccruals in consumers seem to have a bit of a jump. Is there something technical there?
[Answer] There is something technical, which has to do with customers in the — Home Lending customers in the L.A. area, using our forbearance availability as a result of the wildfires. So that is resulting in an uptick in the nonperforming. But when you think about land value, and the insurance there, the actual loss expectation is de minimis, I would say.
10. Management thinks tariff-related risks have reduced a little; management has not seen any pressure on loans because of tariffs
When it comes to tariffs, I think the initial Liberation Day, now there’s more talk as more things getting done, a couple have been announced, a couple have been delayed, that reduces that risk a little bit. And hopefully, they’ll get done. So there’s still risk out there, but I am hopeful that some of these frameworks are completed soon, at least before August 1…
…What’s the tariff pressure with pressure on loans or debt. The answer is no.
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