JPMorgan CEO Jamie Dimon Warns the Chance of an Economic Downturn Is 'Higher Than Other People Think'

The U.S. economy seems to be in a pretty good place. Unemployment is low and March's jobs report well exceeded economists' expectations.

Despite that, one financial expert isn't convinced that things are totally rosy. But should you heed his rather ominous warning?

JPMorgan CEO still thinks things could take a turn for the worse

In an April 12 press release, JPMorgan CEO Jamie Dimon was quick to warn investors that while the economy seems strong and stable now, things could change in short order. "Looking ahead, we remain alert to a number of significant uncertain forces," he wrote.

Dimon pointed to geopolitical tensions and stubborn inflation as factors that could lead to unfavorable economic conditions. And he also said the chances of conditions souring are "higher than other people think."

Should you be worried about a recession?

Dimon's warning about an economic decline might initially cause you to panic. But it's important to take that warning with a proverbial grain of salt.

This isn't the first time Dimon has warned of negative economic activity. And he's been wrong in the past.

In late 2022, Dimon said the U.S. economy was headed toward something worse than a recession. But lo and behold, more than 18 months later, economic conditions are quite favorable. 

What's more, Dimon acknowledges that U.S. consumers are sitting on excess money in savings accounts and have access to a thriving labor market. So he was quick to acknowledge that, "Even if we go into recession, {consumers are} in pretty good shape." However, he did caution that lower earners may be running out of money, and quickly. 

Don't panic, but be prepared

Dimon may have a lot of financial knowledge, but he doesn't have a crystal ball. So it's hard to know whether the chances of a recession are, indeed, higher than people might think.

Even if we manage to avoid a near-term recession, at some point in time, economic conditions are likely to sour. It's important to be prepared for a recession at all times. 

That means ideally having enough money in savings to cover three full months of living expenses at a minimum to get through a period of unemployment should that come to be. If you're nowhere close, make boosting your emergency fund your priority. Consider your existing budget to decide how much to save. 

Also, do your best to shed high-interest debt while you're still gainfully employed. The sooner you do, the less money you'll throw away on interest, leaving more available for your savings. Also, that way, should you lose your job, you won't have another expensive monthly payment hanging over your head.

Finally, make a point to keep your job skills current and maintain strong relationships with the people in your professional network. You never know when you might have to call in a favor. 

And if you feel there are skills that could make you a more valuable asset to an employer, make an effort to build them. That could spell the difference between losing a job during a period of downsizing or remaining employed. Or, in the event of a layoff, having extra skills could make you a lot more employable. 

There's definitely no need to lose sleep over Dimon's latest musings. But do try your best to set yourself up to withstand a recession -- whether that happens within the next year or far into the future.