JP MORGAN CHASE(US:JPM)2025-09-01 03:21Investment Rating - The report suggests a warranted Federal Reserve cut, with a near-term recession risk in the US elevated at 40% [3]. Core Insights - The report highlights a delicate balance in the US economy, with weak job growth and concerns about labor demand impacting consumer sentiment and spending [2][3]. - Despite the challenges, nominal US gross domestic income rose robustly by 6.8% annualized rate last quarter, with corporate profits also showing a significant increase of 6.8% annualized [10]. - The report indicates a surge in capital expenditures (capex), with business investment driving growth, and a notable 15.3% annualized increase in equipment spending in the first half of the year [10][11]. Summary by Sections Global Economic Outlook - The US GDP growth for 3Q25 is revised up to 2.5%, supported by strong capex and balanced income growth despite soft labor demand [9][10]. - Global capex strength remains intact, with upward revisions in GDP growth forecasts for Asia, particularly Taiwan, which is expected to see a modest 0.5% annualized rise in GDP this quarter [16]. Economic Activity Tracking - The report notes a significant 6.8% annualized gain in corporate profits, despite rising tariff payments, indicating stable profit margins [10]. - Consumer spending is expected to align with income gains, which are rising at about a 2% annualized rate, suggesting that softening labor demand is not significantly dragging on current-quarter GDP growth [11]. Regional Insights - In Japan, the economy shows resilience with positive signals from corporate sentiment and consumer confidence, despite some recent declines in industrial production [18]. - India's GDP growth for 2Q surpassed expectations at 7.8% year-over-year, but the impact of new US tariffs is anticipated to pose risks to labor-intensive sectors [26]. Global Trade and Industrial Activity - Global industrial production stalled, with export volumes contracting at a 2.5% annualized rate, particularly affecting the Euro area [14]. - Despite challenges, US tech import demand remains resilient, and there is underlying strength in global capex [15].