BUSINESS

Jeff Bezos is the latest to warn on the economy, saying it’s time to ‘batten down the hatches’

Amazon CEO Jeff Bezos speaks during the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021.

Paul Ellis | Reuters

Amazon founder Jeff Bezos has become the latest corporate leader to warn about the state of the economy, cautioning that rougher times are likely ahead.

In a tweet posted Tuesday evening, the former president and CEO of the online retailing giant echoed comments that Goldman Sachs Chief Executive David Solomon made to CNBC earlier in the day.

“Yep, the probabilities in this economy tell you batten down the hatches,” Bezos said in a comment attached to a clip of Solomon’s “Squawk Box” interview.

Solomon, the head of the Wall Street financial giant, said it’s time for both corporate leaders and investors to understand the risks building up, and to prepare accordingly.

Solomon spoke after his firm had just posted quarterly earnings results that beat Wall Street estimates. Yet he said a recession could be looming as the economy deals with persistently high inflation and a Federal Reserve trying to lower prices through a series of aggressive interest rate increases.

“I think you have to expect that there’s more volatility on the horizon,” Solomon said. “Now, that doesn’t mean for sure that we have a really difficult economic scenario. But on the distribution of outcomes, there’s a good chance that we have a recession in the United States.”

Fed officials have also been warning that a recession is possible as a result of the monetary policy tightening, though they hope to avoid a downturn. Policymakers in September estimated that gross domestic product would grow just 0.2% in 2022 and rebound in 2023, but to only 1.2%. GDP contracted in both the first and second quarters this year, meeting a commonly held definition of a recession.

There have been mixed signals lately from corporate leaders.

JPMorgan Chase CEO Jamie Dimon has been warning of troubles ahead, saying recently that the situation is “very, very serious” and that the U.S. could slip into recession in the next six months.

However, Bank of America CEO Brian Moynihan told CNBC on Monday that credit card data and related information show that consumer spending has held up.

“In the current environment, the consumer is quite good and strong,” he said on “Closing Bell.”

Moynihan acknowledged that the Fed’s efforts could slow the economy, but noted that “the consumer’s hanging in there.”

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