Billionaire Jeff Bezos, the founder of e-retail behemoth Amazon, has some spending tips as Americans prepare for the holiday shopping season — amid four decades of inflation and recession worries.
Here’s what he said:
“‘If you’re a single person thinking of buying a big screen TV, maybe hold off on that, keep that money, see what happens. Same thing with a fridge, a new car, whatever. Take risk off the table.’“
Bezos made the comments in CNN’s WBD,
interview that aired this week, the same interview in which he promised to give away most of his fortune in his lifetime.
Why did Bezos offer the tip to consumers and small businesses to go easy on big-ticket items? He gave one big reason.
“If we’re not in a recession right now, we’re probably going to be in one soon,” he said in the interview, while raising his arms. tweet a warning last month that “the probabilities in this economy tell you to push the essays down.”
Bezos is currently the executive chairman of Amazon AMZN,
moving into the role last year when Andy Jassy took over as CEO.
Later this week, Amazon confirmed it was laying off some of its staff in its devices and services business – joining a growing list of tech companies, including Facebook parent Meta META,
— which is annoying people. Amazon could have about 10,000 job cuts, according to the Wall Street Journal.
“Critics are taking aim at these words of thrift coming from a man – now worth about $120 billion – who launched Amazon into the online shopping bonanza.“
To be sure, Bezos is not alone in his worries about a potential recession as the Federal Reserve and other central banks battle higher costs by raising interest rates.
But his advice prompted some guffaws on social media. In short, critics say these are parsimonious words coming from a man – now worth about $120 billion – who launched Amazon into the online shopping bonanza that allows consumers to spend money seamlessly.
As Joshua Becker, proponent of minimalism write on Twitter: “I haven’t heard of him abstaining from Amazon’s Prime Day deals or black friday offers, but I recommend adding those items to your list as well.”
No matter how anyone feels about hearing spending advice, especially from one of the richest people in the world, there are a few things to consider as events like Black Friday and Cyber Monday approach.
For one thing, there may be discretionary expenses that people can cut back on. Many Americans are still spending briskly, according to Walmart WMT,
third quarter earnings and October retail sales numbers were recently announced. Holiday spending projections show the same picture.
Americans will spend between $942.6 billion and $960.4 billion on holiday season sales this year, according to projections from the National Retail Federation. Last year’s holiday sales totaled $889.3 billion, the trade association said.
“During the third quarter, Americans’ credit card balances rose to $930 billion, the largest annual increase in more than 20 years, according to the National Retail Federation.“
But Americans are planning for the holidays while credit card balances are increasing—probably because credit cards are helping them keep up with rising costs.
During the third quarter, Americans’ credit card balances rose to $930 billion, the largest annual increase in more than 20 years, according to data from the Federal Reserve Bank of New York.
While balances rise, so do credit card interest rates. The annual percentage rate (APR) on new credit card offers averaged 19.14% in mid-November, according to Bankrate.com. That beats the old record for APRs for new cards, set at 19% three decades ago.
The holiday shopping season is typically when Americans rack up credit card debt, pay off the debt early in the coming year, and repeat the holiday season debt the following year.
This year, the stakes could be higher with high credit card bills and job losses due to the recession.
“This is not the time to overspend and have a problem paying your bills later,” Michele Raneri, vice president of financial services research and consulting at TransUnion TRU,
one of the country’s top three credit bureaus, MarketWatch previously said. “We know the economy is sending mixed messages.”