Amazon founder Jeff Bezos is the latest corporate giant to warn Americans to brace for a painful economic downturn, cautioning that rougher times are likely ahead.
“Yep, the probabilities in this economy tell you batten down the hatches,” Bezos tweeted in response to Goldman Sachs CEO David Solomon’s interview with CNBC.
Solomon spoke after Goldman Sachs posted higher-than-expected third-quarter earnings results, yet he said a recession could be looming as the economy is hit with persistently high inflation and the Federal Reserve’s aggressive interest rate increases.
Fed officials, who downplayed the risk of inflation for most of 2021, have also been warning that a recession is possible due to raising interest rates, though they hope to avoid an economic downturn.
Fed Chairman Jerome Powell repeatedly downplayed the risk of inflation in 2021 before finally admitting in December that he was retiring the word “transitory” to describe the inflationary outlook. In July, Powell was asked repeatedly during a news conference whether he thought the economy was in, or headed toward, a recession. “And every time, he answered: No, not at all,” New York Times reported.
The U.S. is technically in a recession — a commonly used definition triggered when a country’s real gross domestic product (GDP)—the most-watched indicator of economic activity—contracts for two or more consecutive quarters, as happened in the first half of 2022. Most economists agree that this defines a recession.
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In September, policymakers estimated that GDP would grow 0.2 percent in 2022 and 1.2 percent in 2023. GDP contracted in both the first and second quarters this year, meeting a commonly held definition of a recession.
President Joe Biden has been accused of recession denial and of trying to control the economic narrative. The White House has been reluctant to use the “R” word, pointing to underlying strength in jobs and the economy. A recession poses a problem for Democrats going into the midterm elections, which will determine the party that controls Congress.
Bezos’ warning to batten down the hatches was met with something less than appreciation on Twitter and skepticism about how his words could move markets.
Forbes ranks Bezos as the world’s third-richest man with a net worth of $141.1 billion. Tesla founder and CEO Elon Musk is No. 1.
“Oh thanks worlds richest man I’m glad you care about my financial status” dubs @bigmandubs tweeted.
“Oh thanks mr obvious is been painful for months now” wrote Polish_Prince__.
“Probably best to worry about his employees first” @CryptoDrizzy6 tweeted, drawing attention to brutal working conditions Amazon warehouse workers had to endure at the onset of the covid pandemic. Lack of protection against covid-19 led to a walkout and strike at the Staten Island, New York Amazon warehouse early in the covid outbreak.
Walkout organizer Chris Smalls, an Amazon management assistant, was fired for speaking out in support of workers. Smalls ultimately led the formation of the first Amazon labor union.
Bezos sold more than $8.8 billion worth of Amazon stock in 2021 alone, and some $29 billion worth since starting the company, Forbes calculated. His stake in Amazon has gone from 42 percent in 1997 to less than 10 percent.
“Hmmm, Bezos says this and Amazon stock goes down. Bezos then buys more Amazon stock to control more shares. Financial news finds out and reinterviews him. He then says the economy is looking stable and Amazon stock shoots up” Shawn Aarhus tweeted.
“Sounds like Elon Musk” Int’l Man replied.
Photos: Amazon founder Jeff Bezos during the JFK Space Summit in Boston, June 19, 2019. (AP Photo/Charles Krupa) / President Joe Biden speaks to journalists at Delaware Air National Guard Base in New Castle, Del., Sep. 11, 2022. / Federal Reserve Chairman Jerome Powell at a news conference, March 3, 2020 (AP Photo/Jacquelyn Martin)