Jeff Bezos Says 'Batten Down The Hatches' About a Possible Recession, but a Top Credit Agency Says It Will Be 'Mild' Low unemployment and a healthier housing market make this possible upcoming recession different from 2008, the agency said.
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Pretty much everyone is preparing for the possibility of a recession — including Jeff Bezos.
The billionaire Amazon founder and executive chairman said to "batten down the hatches" in a Tweet yesterday.
Yep, the probabilities in this economy tell you to batten down the hatches. https://t.co/SwldRdms5v— Jeff Bezos (@JeffBezos) October 18, 2022
Bezos was replying to a comment by Goldman Sachs CEO David Solomon on CNBC's "Squawk Box" where he said in the "distribution of outcomes" there's a "good chance we could have a recession."
A "distribution of outcomes," is a statistical method that shows all of the possible outcomes of a situation — think of the most common, the "bell curve."
It has led many to suggest a recession is inevitable. On Monday, Bloomberg economists predicted a 100% chance of a recession in the next 12 months in the U.S., particularly because of the Federal Reserve's continued rate increases.
But not everyone is saying the same thing. One high-profile credit rating company, Fitch Ratings, has argued that the U.S. will experience a "mild" recession in Spring 2023, CNN reported.
The union argued the upcoming recession would be "broadly similar" to one that happened from July 1990 to March 1991, which was short and mild by historical standards, as the unemployment rate increased by two points. In the Great Recession, it went up by nearly four points, for example.
It said the time leading up to that recession in the '90s has similarities to our present moment. Like then, oil prices were being driven up by an international conflict. It also says that the Fed was attempting to deal with inflation by raising interest rates then like it is now.
Fitch added it thinks low unemployment and a healthier housing market would prevent an upcoming recession from being as bad as 2008.
Whatever happens, Solomon said entrepreneurs who are running "risk-based businesses," might need to take a pause.
"It's a time to think more cautiously about your risk box, your risk appetite," he said.
Companies from Meta to Google have cut costs and announced layoffs in anticipation of a downturn. Even Amazon has implemented cost-cutting measures, though it recently gave its warehouse employees a (small) raise that rankled workers.