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Recession definition
A recession is a broad, sustained decline in economic activity that runs longer than a brief slowdown. It shows up across production, employment, income, consumer spending, and business investment at the same time.
A recession is often shorthand for two consecutive quarters of falling GDP, but GDP alone does not settle every case. Economists also weigh the labour market, real income, industrial production, retail sales, and credit conditions before calling one.
A recession differs from a depression by scale. A recession is a recurring phase of the economic cycle that usually lasts months. A depression is far deeper and longer, with a sharper fall in output and employment that can stretch over years.
Recession Example
A country reports weaker economic data for several months. GDP contracts for two consecutive quarters, unemployment rises, retail sales fall, and industrial production declines.
These conditions point to a recession, because the decline runs across several major indicators at once rather than in a single sector.
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