Black Friday surprise: Jeff Bezos tells people not to buy cars, refrigerators and other big-ticket items. Critics call him out.
Billionaire Jeff Bezos, who founded the e-tail behemoth Amazon, has some spending tips as Americans gear up for the holiday shopping season — amid four-decade-high inflation and recession worries.
Here’s what he said:
“‘If you’re an individual and you’re thinking about buying a large-screen TV, maybe slow that down, keep that cash, see what happens. Same thing with a refrigerator, a new car, whatever. Just take some risk off the table.’”
Bezos made the comments in a CNN
interview that aired this week, the same interview in which he pledged to give away most of his fortune in his lifetime.
Why did Bezos offer the tip for consumers and small business to go easy on big-ticket items? He provided one big reason.
“If we’re not in a recession right now, we’re likely to be in one very soon,” he said in the interview, picking up on a cautionary tweet last month that “the probabilities in this economy tell you to batten down the hatches.”
Bezos is currently executive chair at Amazon
transitioning to the role last year as Andy Jassy took up the CEO reins.
Amazon went on to confirm it was laying off some of its staff in its device and services business — joining a growing list of tech companies, including Facebook parent Meta
— in eliminating large numbers of jobs. Amazon’s job cuts could number around 10,000, according to the Wall Street Journal.
“Critics have taken aim at these words of thrift coming from a man who built Amazon into the 800-pound gorilla of U.S. online shopping and is personally worth some $120 billion.”
To be sure, Bezos is not alone is his worries about a potential recession as the Federal Reserve and other central banks fight higher costs by hiking interest rates.
But his advice prompted some guffaws on social media. In a nutshell, critics say these words of thrift are a bit rich coming from a man — Bezos is now worth approximately $120 billion — who built Amazon into an online megabazaar where consumers are encouraged to seamlessly spend money.
As Joshua Becker, a proponent of minimalism, wrote on Twitter: “I didn’t hear him mention refraining from Amazon’s Prime Day deals or Black Friday offers, but I recommend adding those items to your list as well.”
Regardless of how one feels about receiving spending advice, including from one of the world’s wealthiest people, there are worthwhile considerations as holiday shopping promotions ramp up.
For one thing, maybe there are discretionary expenses where people can cut back. Many Americans are still spending briskly, as Walmart
third-quarter earnings and October’s retail-sales numbers recently affirmed. Holiday spending projections paint the same picture.
Americans will spend between $942.6 billion and $960.4 billion this holiday season, according to projections from the National Retail Federation. Holiday sales last year totaled $889.3 billion, the trade association said.
“During the third quarter, Americans’ credit-card balances climbed to $930 billion, the biggest annual increase in more than 20 years, according to the National Retail Federation.”
But Americans are planning for the holidays even as credit-card balances are increasing — likely because credit cards are helping many people keep pace with rising costs.
During the third quarter, Americans’ credit-card balances climbed to $930 billion, the biggest annual increase in more than 20 years, according to Federal Reserve Bank of New York data.
While balances grow, so do credit-card interest rates. The annual percentage rate, or APR, on new credit-card offers averaged 19.14% in mid-November, according to Bankrate.com. That beats the old record on APRs for new cards: 19%, three decades ago.
The holiday shopping season is typically when Americans accumulate credit-card debt, paying those debts in the early part of the following year and repeating the process at the end of that year.
This year, the stakes are higher amid risk that credit-card bills could arrive and a recession-induced job loss follow. “It’s not the time to overspend and have a problem with paying your bills later,” Michele Raneri, vice president of financial-services research and consulting at TransUnion
one of the country’s three major credit bureaus, has told MarketWatch. “We know the economy is sending mixed messages.”