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Billionaire Jeff Bezos said people can prepare for recession by holding off on buying big-ticket items like TVs and cars as he predicts the US economy may be in contraction by 2023.
Americans can ‘take risk off the table’ by keeping their cash for a rainy day, said the Amazon founder as he outlined his top tips for surviving a recession.
Speaking to CNN Business, the entrepreneur said people should hold off on big purchases and keep some ‘dry powder’ for the future.
He added he couldn’t predict how long the downturn would last, but said the US would likely be in a downturn ‘very soon’ if it was not in one already.
Hammered by inflation, consumers have stretched to make ends meet and increasingly tapped lines of credit, with new data this week showing that household debt surged to $16.51 trillion last quarter, rising at the fasted rate since 2008.
Though annual inflation dropped last month to 7.7 percent, its lowest level since January, many economists believe a sharp recession marked by major job losses could be inevitable within the next year.
Layoffs could be especially hard on families who have drained their savings to keep up with the rising price of groceries, gasoline and utilities.
Commerce Department data shows the personal savings rate, which surged during pandemic lockdowns, has dropped to 3.1 percent in September, far below the pre-pandemic average of 8.8 percent in 2019.
Amazon founder Jeff Bezos said people can prepare for recession by holding off on buying big-ticket items like TVs and cars as he predicts the US economy may be in contraction by 2023
A Bloomberg economic forecast last month projected a higher recession probability across all timeframes, with the 12-month estimate of a downturn by October 2023 hitting 100%
Hammered by inflation, consumers have stretched to make ends meet and increasingly tapped lines of credit after draining their savings
Amazon itself is planning to lay off up to 10,000 employees, the largest mass layoff in the company’s history, according to The New York Times.
The retail company, which makes most of its money from web services, is the second-biggest employer in the US, behind only Walmart.
‘The economy does not look great right now, things are slowing down, you are seeing layoffs in many, many sectors of the economy,’ said Bezos.
He appeared alongside Lauren Sanchez, his 52-year-old girlfriend, after embarking on a philanthropic venture.
The news comes after the founder announced he he will give away most of his $124billion fortune to charities fighting climate change.
Bezos said he wants to support people who can unify humanity and heal deep social and political divisions.
The tycoon did not give specific details about the charities he will donate to or how much he will give or when during an interview with CNN.
It comes as his ecommerce giant Amazon is set to lay off thousands of employees with just weeks to go before the busy holiday season.
Total household borrowing reached $16.51 trillion in the third quarter, a $351 billion increase from the prior quarter and 8.3 percent jump from a year ago
He added he couldn’t predict how long the downturn would last, but said the US would likely be in a downturn ‘very soon’ if it was not in one already
Sitting alongside his partner Lauren Sanchez, the businessman said they are ‘building the capacity to be able to give away this money’.
Bezos said: ‘The hard part is figuring out how to do it in a levered way. It’s not easy, building Amazon was not easy.
‘It took a lot of hard work, a bunch of very smart teammates and I’m finding that philanthropy is very similar – it’s not easy it’s very hard.
‘We are building the capacity to being able to give away this money. There are a bunch of ways that I think you could do ineffective things, too.
‘So you have to think about it carefully and you have to have brilliant people on the team.’
‘I’ve always said: I try to put my money where my heart is,’ the country music legend said as she accepted her award. ‘I will do my best to do good things with this money’
Previously Bezos has been slammed for not signing the Giving Pledge, which is made up of hundreds of the world’s richest people to donate the majority of their wealth to charitable causes.
The fourth wealthiest person in the world declined to say exactly how much he would be giving away, or where it is likely to be spent.
He has refrained from setting a target amount to give away in his lifetime and has committed $10billion over 10 years – about 8 per cent of his current net worth – to the Bezos Earth Fund.
Bezos also explained why he handed Dolly Parton $100million for her ‘love and compassion in work’ – announcing the prize on Friday.
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