The market turmoil seen this week has less to do with the U.S. debt ceiling or the crisis in Europe than weak economic numbers for the first half of the year, the downturn in consumer spending and continued weakness in the housing market, Jes Staley, CEO of Investment Bank at JPMorgan Chase, told CNBC Thursday.
"The challenge in the United States is unemployment. Unemployment is clearly weighing on consumer confidence, and we as a nation need to deal with the unemployment issue to get consumer confidence up," Staley said.
Another key component is the housing market, he added. "If we get the consumer demand going I think the economy is poised to recover."
JPMorgan lowered its U.S. economic forecast by 1 percent for the third quarter, and does not expect the Federal Reserve to raise interest rates until the middle of 2013 at the earliest. The firm also expects gross domestic product growth to be no higher than 1.5 percent rather than 2.5 percent previously forecasted for the quarter.
However, Staly acknowledged that U.S. corporations are very strong, earnings are up from the financial crisis and exports are up 20 percent.
"There is a lot there in corporate America to get moving once we can get the consumer demand going."
In terms of Europe, he went on to say that over the long term it has "the economic wherewithal to deal with the crisis that it's currently facing."
"What's going on right now is not something that is new and I think the markets have been managing in difficult times for quite some period of time, so we're an extender of credit to Europe and extender of credit to the European banking system," explained Staley. "There are tremendous financial institutions in Europe—these are great banks."
Lastly, the United States is in a "significantly better position " and "much healthier" today compared to the financial crisis, he concluded.
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