Wells Fargo CEO Charles Scharf said Wednesday that businesses and high-income consumers are thriving, while low-income Americans struggle to float.
Bank data shows that “companies are in great shape,” and while spending and debt repayment rates are stable among all income levels, there are signs of stress among low-income earners, Scharf said in an interview with CNBC’s Squawk Box.
“There’s this big dichotomy between high-income and low-income consumers, and it continues and is a real problem,” Scharf said.
“The low-end is about spending the money they have, so their balance is below… They live on the edge,” he said.
Scharf answered questions about the US economy the day after JPMorgan Chase CEO Jamie Dimon said the Labor Department’s report showed the economy was weakening. Jobs have halted in recent months, with the latest revision of the division on Tuesday cutting 911,000 positions annual job creation through March.
“If you look at the overall data from a job perspective, you can’t deny it,” Scharf said.
“Yeah, I actually feel very good today and things feel very good compared to what I think you are certainly,” he said. “But it’s not equal across wealth spectra, and probably has more drawbacks than upwards.”
Executives and investors are working on a mixed signal about the US economy in the first year of President Donald Trump’s second term. The stock index is close to the highest ever, amidst a persistent concern over price inflation and job creation.
Schaff said many CEOs support Trump’s efforts to address the imbalance of the country’s trade with mid-market companies across the United States. Still, he said the job could likely be a job creation.
“They are willing to deal with uncertainty and they need to respond to it,” Scharf said. “So some of them are very wise about how they are hiring…. It certainly seems to be keeping the increase in employment.”
