Amazon estimates a 30% chance of US recession in the next 6 months, internal analysis shows. That’s a more positive outlook than other estimates. Some have 100% odds of a recession in 2023. Amazon anticipates a soft landing for the US economy, according to the leaked analysis. Most economists, banks, and think-tanks expect a recession in 2023. A leaked internal document from Amazon suggests a brighter outlook, especially for the US economy. According to an internal macroeconomic analysis from November, obtained by Insider, the company sees a 30 % chance of a US recession within the next 6 months. Based on recent data showing continued labor demand and wage increases, Amazon also anticipates a soft landing for the US economy, a term used to describe a slow-growth period that avoids a recession, the internal report said. That’s a stark contrast to many other forecasts. A Bloomberg Economics study from October said the US had a 100% chance of entering a recession within the next 12 months. A Federal Reserve staff report from November found an almost 50% odds of a US recession next year, while an October survey by the Wall Street Journal put the probability at 63%. “The US economy, on the other hand, continues to send mixed signals and does not appear to be in a recession (yet),” Amazon stated in its report. “These dynamics are consistent with a soft-landing scenario (eg mild increase in the unemployment rate, slowdown in hiring and quits, little rise in job destruction) though the impact of continued tightening by the Federal Reserve will affect the labor market with a delay .” The 12-page report, put together by Amazon’s science, economic, and finance teams, gives a rare look into the e-commerce giant’s view of the economy. The company has more than 160 million Prime subscribers in the US who shop regularly. That’s 62% of the population, according to Insider Intelligence estimates. This gives Amazon an unprecedented view of activity in the world’s largest economy. Its relatively cheerful forecast suggests the US may avoid a major downturn, despite high inflation, steady interest-rate hikes, and sustained geopolitical tension. Insider asked multiple Amazon spokespeople for comment twice on Tuesday, ahead of publication. Roughly 48 hours later, after publication on December 22, one of the spokespeople provided the following statement: “The document in question does not reflect the company’s position on the economy and where it’s headed. Our CFO Brian Olsavsky shared our thinking on our most recent earnings call, and our CEO shared his thoughts in a Dec. 6 interview at the Dealbook event. This document simply reflects the thoughts of some of our economists.’Partially shielded’Amazon sees a higher risk of a recession in other parts of the world. In the Euro Area and the UK, the odds are at 70% and the global economy is at 40%, the report said.Yet, even if a recession were to come and unemployment rose, Amazon appears less concerned about the impact on its sales . The report said Amazon is “partially shielded” against a recession because nearly 60% of Amazon’s revenue comes from wealthier customers who are “less responsive to unemployment rate changes.” Customers in lower-income brackets, who are more susceptible to unemployment, “account for a small portion of overall sales,” it added. But given new Amazon customers who drive most of the sales growth come from lower-income areas, the report said. “a recession has the potential to impact this group’s expenditure” and the company’s long-term expansion. It also cautioned that rising mortgage rates and a declining housing market could have “spillover” effects on household expenditures, including purchases of home goods, such as furniture, home furnishings, and electronics.While US inflation jumped to a range of 7% to 9% This year, Amazon hasn’t raised its product prices as much, the report note. In 2022, the price of products sold on Amazon climbed a little less than 6%, and that rate of increase is expected to drop below 3% in 2023, before turning negative in 2024, it said.’Downward revisions’Amazon, for its part, has significantly cut costs by shutting down multiple businesses and laying off tens of thousands of employees in recent months. In October, Amazon’s CEO Andy Jassy told employees in an internal all-hands that the company would be more thoughtful about its spending going forward, as Insider previously reported. “It’s on a lot of people’s minds, and of course, none of us know.” for sure what’s gonna happen, but there are a lot of signs that point to this being a difficult and rough economy ahead of us,” Jassy said. The internal report from November said the US economic outlook for 2023 has “worsened significantly” and baseline forecasts now see growth falling below 1%. Similar downward forecasts are applied to other advanced economies, the report said, citing the October IMF World Economic Outlook for global growth that was the weakest since 2001. All this could make it hard for Amazon to achieve growth and profitability at the same time. Historically, Amazon saw its profit margins shrink when its business grew, and vice versa, the report noted. In the current climate, where Amazon is looking to dramatically cut costs, growth could be hard to come by. “There is a clear tradeoff between the interplay of profit seeking and growth, making it difficult to achieve both objectives simultaneously,” the report said. . “As our pendulum swerves to cut costs in pursuit of higher profit margins, this may undermine our ability to grow at a faster pace in the near — or mid-term.” Do you work at Amazon? Got a tip? Contact reporter Eugene Kim via the encrypted messaging apps Signal or Telegram (+1-650-942-3061) or email (email@example.com).