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Billionaire Jeff Bezos said people can prepare for a recession by waiting to buy big items like TVs and cars as he predicts the US economy may contract in 2023.
Americans can “take risk off the table” by saving their money for a rainy day, the Amazon founder said as he outlined his top tips for surviving a recession.
Speak against CNN affairssaid the entrepreneur that people should hold off on major purchases and save some “dry powder” for the future.
He added that he could not predict how long the recession would last, but said the US was likely to enter a recession “very soon” if not already.
Hammered by inflation, consumers have struggled to make ends meet and have tapped into more and more lines of credit. New data this week shows that household debt rose to $16.51 trillion in the past quarter, up at the rapid pace since 2008.
Although annual inflation fell to 7.7 percent last month, the lowest level since January, many economists believe a sharp recession, marked by large job losses, could be inevitable in the coming year.
Layoffs can be particularly difficult for families who have drained their savings to keep up with the rising prices of groceries, gas and utilities.
Data from the Commerce Department shows that the personal savings rate, which soared during pandemic lockdowns, fell to 3.1 percent in September, well below the pre-pandemic average of 8.8 percent in 2019.
Amazon founder Jeff Bezos said people can prepare for a recession by waiting to buy big items like TVs and cars, as he predicts the US economy could contract by 2023.
An economic forecast from Bloomberg last month predicted a higher recession probability across all time frames, with the 12-month estimate of a downturn reaching 100% by October 2023
Hammered by inflation, consumers have scrambled to make ends meet and tapped into more and more lines of credit after draining their savings
Amazon itself plans to lay off up to 10,000 employees, the largest mass layoff in the company’s history. The New York Times.
The retail company, which makes most of its money from web services, is the second-largest employer in the US, behind only Walmart.
“The economy isn’t looking great right now, business is slowing down, you’re seeing layoffs across a lot of sectors of the economy,” Bezos said.
He appeared alongside Lauren Sanchez, his 52-year-old girlfriend, after embarking on a philanthropic endeavor.
The news comes after the founder announced that he will be giving away most of his $124 billion fortune to charities fighting climate change.
Bezos said he wants to support people who can unite humanity and heal deep social and political divisions.
The magnate did not give any 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 its e-commerce giant Amazon is about to lay off thousands of employees with just weeks left before the busy holiday season.
Total household borrowing reached $16.51 trillion in the third quarter, up $351 billion from the previous quarter and up 8.3 percent from a year ago
He added that he could not predict how long the recession would last, but said the US was likely to enter a recession “very soon” if not already.
Sitting next to his partner Lauren Sanchez, the businessman said they are “building the capacity to be able to give this money away.”
Bezos said, “The hardest part is figuring out how to do it in a lever-like way. It’s not easy, building Amazon wasn’t easy.
“It took a lot of hard work, a bunch of very smart teammates and I find that philanthropy is very similar – it’s not easy, it’s very hard.
“We are building the capacity to be able to give this money away. There are a lot of ways I think you can do ineffective things too.
“So you have to think it through 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 when she accepted her award. “I will do my best to do good things with this money”
Previously, Bezos was criticized for not signing the Giving Pledge, which is made up of hundreds of the world’s richest people to donate most of their wealth to charity.
The fourth richest person in the world declined to say exactly how much he would give away, or where it is likely to be spent.
He has refrained from setting a target amount to give away during his lifetime and has pledged $10 billion – about 8 percent of his current wealth – to the Bezos Earth Fund over 10 years.
Bezos also explained why he handed Dolly Parton $100 million for her “love and compassion in work” – announcing the award on Friday.