Amazon founder Jeff Bezos
told CNN in an interview which aired Sunday that he believes the United States is either already in the grips of a recession or is likely going to be in one “very soon,” advising both consumers and small businesses to de-risk and hold more cash.
“The probabilities say if we’re not in a recession right now, we’re likely to be in one very soon,” Bezos said in the interview, which came just days after fellow tech mogul Elon Musk
warned of a “serious recession” that would last one or two years.
Bezos, who despite losing more than $68 billion so far this year amid the tech stock rout, still ranks fourth on the
Bloomberg Billionaires Index, said he’s not sure if the country is “technically” in a recession.
“What I can tell you is the economy does not look great right now, things are slowing down, you’re seeing layoffs in many many sectors of the economy, people are slowing down,” Bezos told CNN.
‘Recession PTSD’
Job cuts in the tech sector have
reportedly accelerated to levels not seen since the early days of the COVID-19 pandemic as companies brace for a downturn.
Musk, who has taken over Twitter and moved to slash jobs amid falling revenues, told Twitter staff that he has “recession PTSD” [post-traumatic stress disorder] and that the social media platform would be “disproportionately” affected by a contraction amid a pullback in advertising.
“We are headed into, I think, quite a serious recession,” Musk said, according to a transcript of his talk
reported on by The Verge. “And you can see that with basically every company doing layoffs. It’s not just Twitter. And in a recession, advertising is disproportionately affected.”
After taking over Twitter, Musk has made a number of changes, including rolling out an $8 verified blue check subscription service to boost revenue. He said the company was losing around $4 million a day.
Amazon, which is rumored to be planning major job cuts, has
already made cutbacks, including canceling or postponing new warehouses and announcing a hiring freeze.
‘Take Some Risk Off the Table’
In light of the existing or imminent downturn, Bezos advised consumers and businesses to put off big purchases.
“Take some risk off the table,” Bezos said. “If you were going to make a purchase, maybe slow down that purchase a little bit. Keep some dry powder on hand and wait a bit.”
His remarks dovetail with a
warning last month that it was time to “batten down the hatches,” a remark he made in response to Goldman Sachs CEO David Solomon predicting a recession was likely.
While the United States recorded two consecutive quarters of negative GDP growth this year, meeting the rule-of-thumb definition for a recession, it has yet to be formally designated as such by the business cycle arbiters at the National Bureau of Economic Research (NBER).
In the third quarter of 2022, the U.S.
economy grew 2.6 percent, giving fuel to the view that America may not be in a recession. The Federal Reserve Bank of Atlanta’s GDP Nowcast model, which estimates GDP growth in real time, shows the U.S. economy growing by 4.0 percent in the fourth quarter,
as of Nov. 9.
Meanwhile, the International Monetary Fund (IMF) issued on Nov. 14 a fresh warning about economic headwinds.
“The G20 Leader’s Summit in Bali takes place amid darkening clouds on the economic horizon,” said Gita Gopinath, IMF deputy managing director, in a
statement on Twitter.
“Surveys of activity in both global manufacturing and services were in contractionary territory in October,” she added.
In mid-October, the IMF
predicted that that one-third of the global economy would likely fall into a recession in 2022 or 2023.
Now that outlook has turned even “gloomier,” the IMF noted in a
blog post on Nov. 13, citing a number of recent high-frequency economic indicators that show more countries have fallen to “levels that signal contraction.”
