Wells Fargo CEO Charles Scharf says the U.S. economy is sending “mixed signals,” with wealthier households and corporations thriving while lower-income Americans face mounting financial strain.
In an interview on CNBC’s Squawk Box Wednesday, Scharf described a sharp contrast across the wealth spectrum.
“Companies are in really great shape,” he said, citing steady corporate spending and healthy debt repayment across income levels. “But there is this big dichotomy between higher-income and lower-income consumers which continues and is a real issue.”
According to Scharf, affluent households continue to spend with confidence, while those at the lower end of the income scale are “living on the edge.” Many lower earners have already burned through pandemic-era savings, leaving account balances below pre-2020 levels.
A cooling labor market adds pressure
Scharf’s remarks came a day after JPMorgan Chase CEO Jamie Dimon pointed to weakening labor conditions, citing a U.S. Labor Department revision that slashed job creation estimates by 911,000 positions for the year through March.
“When you look at just the overall data in terms of jobs, it’s undeniable,” Scharf said. “Things actually feel very good today, relative to what you think they could be. But it’s not equal across wealth spectrums, and there’s probably more downside than upside.”
Strong markets, but lingering uncertainty
Despite near-record highs in U.S. stock indexes, executives and investors remain cautious, balancing optimism with concerns over persistent inflation and sluggish hiring in the first year of President Donald Trump’s second term.
Scharf noted that middle-market CEOs broadly support Trump’s push to address trade imbalances through tariffs, but acknowledged that those duties may be weighing on job creation.
“They’re willing to deal with the uncertainty, but they need to react to that,” he said. “So part of that is just being very prudent in how they’re hiring. That certainly seems to be dampening the increase in jobs.”
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