Recession
A significant decline in economic activity lasting more than a few months.
Definition
A recession is a significant, widespread, and prolonged downturn in economic activity. A common rule of thumb is two consecutive quarters of negative GDP growth, though the official determination in the US is made by the National Bureau of Economic Research (NBER) based on multiple factors including employment, industrial production, and retail sales. Recessions are a normal part of the business cycle and have occurred roughly every 5-10 years historically. They typically lead to rising unemployment, falling corporate profits, and declining stock markets. The average post-WWII recession has lasted about 10 months.
Related Terms
Bear Market
A market condition where prices decline 20% or more from recent highs.
EconomyGDP (Gross Domestic Product)
The total monetary value of all goods and services produced within a country in a specific period.
EconomyInflation
The rate at which the general level of prices for goods and services rises, eroding purchasing power.