Recession
Also called: economic contraction
A significant, broad fall in economic activity, often summed up by the rule of thumb of two consecutive quarters of falling real GDP.
The rule of thumb is simple but imperfect. Some countries have committees that date recessions using many indicators, and their verdicts arrive months later. Markets often fall before a recession appears in the data and start to recover while news is still bad.
Learn more in these lessons
- Economic cycles and recessionsHow do economies move through cycles, and why do markets turn first?
- The yield curveWhat is the yield curve, and what can it tell you about the economy?
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