Billionaire Bezos says people can prepare for a recession by waiting to buy TVs and cars

Billionaire Jeff Bezos said people can prepare for a recession by waiting to buy big items like TVs and cars, as he predicted the US economy could contract by 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.

The warning came extraordinarily from the founder of one of the nation’s largest retailers, which relies on robust consumer spending to generate revenue.

Hammered by inflation, consumers have struggled to make ends meet and increasingly used credit lines, with new data this week showing household debt rose to $16.51 trillion over the past quarter, the fastest rate of increase 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 Department of Commerce shows that personal savings, which soared during pandemic lockdowns when people were stuck at home, have now fallen to about half the level reached before the pandemic.

The personal savings rate also fell to 3.1 percent in September, well below the pre-pandemic average of 8.8 percent in 2019.

Amazon itself plans to lay off up to 10,000 employees, the largest mass layoff in the company’s history. The New York Times.

Multiple news outlets reported that the cuts would amount to about 3 percent of Amazon’s approximately 300,000 employees, leaving warehouse and transportation workers unaffected.

On Wednesday, Amazon began notifying employees of layoffs in its appliances and service units, but did not provide details on the number of 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-largest private 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.

The risk of a sharp downturn has increased as the Federal Reserve raises interest rates to combat inflation, which hit a four-decade high this summer.

The Fed is deliberately cooling the economy by raising borrowing costs for households and businesses, but as interest rates rise, the likelihood of a recession increases.

In the first half of 2022, the U.S. economy, as measured by gross domestic product, contracted for two consecutive quarters, meeting one informal definition of a recession.

However, President Joe Biden furiously denied that a recession had begun, and many economists agreed.

GDP returned to growth in the third quarter, growing 2.6 percent, but the gains were largely due to a reversal in the same technical factors that drove the contraction in the first half.

After years of booming growth, the technology sector has been one of the hardest hit by tightening credit conditions, and Silicon Valley has witnessed massive layoffs in recent weeks.

It remains to be seen whether mass layoffs will spread through the wider economy, but so far the job market remains historically tight.

The unemployment rate remained low at 3.7 percent in October, just below six-decade lows reached before the outbreak of the pandemic.

In the new interview, Bezos appeared alongside Lauren Sanchez, his 52-year-old girlfriend, after starting a philanthropic venture.

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.

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.”

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.