Billionaire Bezos says people can prepare for recession by holding off on buying TVs and cars

Billionaire Jeff Bezos tells families to not buy new cars and TVs as the US economy faces recession and household debt soars to $16. 5T as Americans tap into credit to make ends meet – while Amazon gears up to ‘fire 10,000 staff this week’ Amazon founder Jeff Bezos has outlined his top tips for surviving a recession The entrepreneur said people should hold off on big purchases until the future Families without cash reserves could be hit hard by a downturn with mass layoffs Household debt is up and personal savings are down as inflation hits families Amazon is reportedly planning to lay off up to 10,000 employees this week By Tom Brown For Mailonline Published: 06:11 EST, 16 November 2022 | Updated: 12:07 EST, 16 November 2022 e-mail 39 shares 549 View comments 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 fastest 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 personal savings balances, which surged during pandemic lockdowns as people were stuck at home, have now plunged to about half the level reached before the pandemic. 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 As well, the personal savings rate dropped to 3.

1 percent in September, far below the pre-pandemic average of 8. 8 percent in 2019. 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 .

Multiple news outlets reported the cuts would amount to some 3 percent of Amazon’s roughly 300,000 corporate workforce, leaving warehouse and transportation associates unaffected. RELATED ARTICLES Previous 1 Next Tech layoffs now hit Amazon: Workers in ‘unprofitable’. .

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. Share this article Share On Wednesday, Amazon began notifying employees of layoffs in its devices and services units, but did not specify details on the number jobs it will cut or a time period, according to Reuters. The retail company, which makes most of its money from web services, is the second-biggest private 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. The risk of a sharp downturn has been rising as the Federal Reserve raises interest rates to combat inflation, which hit a four-decade high over the summer. The Fed is intentionally cooling the economy by raising borrowing costs for families and businesses, but as rates climb higher, the chances of a recession rise.

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 The number of credit card accounts has been rising quickly, even as auto loans and mortgages taper off or decline 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 In the first half of 2022, the US economy as measured by gross domestic product did contract for two straight quarters, meeting one informal definition of a recession.

However, President Joe Biden furiously denied a recession had begun, and many economists agreed. GDP returned to growth in the third quarter, expanding 2. 6 percent, but the gains were due largely to a reversal in the same technical factors that drove the first-half contraction.

After years of explosive growth, the tech sector has been among the hardest hit by tightening credit conditions, and Silicon Valley has witnessed sweeping layoffs in recent weeks. It remains to be seen whether or not mass layoffs will begin to spread through the wider economy, but so far the labor market remains historically tight. The unemployment rate remained low at 3.

7 percent in October, just off the six-decade lows reached before the onset of the pandemic. GDP grew by 2. 6 percent in the third quarter of 2022, the first time it had grown since the fourth quarter of 2021.

Some economists warned the economy is ‘treading water’ though In the new interview, Bezos appeared alongside Lauren Sanchez, his 52-year-old girlfriend, after embarking on a philanthropic venture. The news comes after the founder announced 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. 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. ‘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’ ‘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. ‘ 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. Advertisement Read more: Jeff Bezos’ top tips for managing the economic downturn | CNN Business Amazon Is Said to Plan to Lay Off Approximately 10,000 Employees – The New York Times Share or comment on this article: Billionaire Bezos says people can prepare for recession by holding off on buying TVs and cars e-mail 39 shares Add comment Comments 567 Share what you think Newest Oldest Best rated Worst rated View all The comments below have not been moderated.

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