A recession is a period of significant, widespread decline in economic activity across the economy, typically lasting several months and often reflected in measures such as real gross domestic product (GDP) and employment. In the United States, the National Bureau of Economic Research (NBER) determines when a recession begins and ends based on a broad set of indicators, rather than a fixed rule like a specific quarterly decline in GDP.
Economists and policymakers watch a range of data to describe a recession, including real GDP, the unemployment rate, consumer spending, business investment, industrial production, and trade. The term is used to frame analyses of economic health, policy response, and the outlook for earnings and financing conditions. While a recession signals a contraction in activity, its severity, duration, and impact vary by sector and across periods.
Recessions are a natural part of the business cycle but do not imply a uniform outcome for financial markets. They can influence central bank policy, fiscal measures, and lending conditions, and they often coincide with shifts in inflation and confidence. Analysts contrast recessions with milder slowdowns or with more severe downturns such as depressions.
During the 2007-2009 period, real GDP contracted and unemployment rose, marking a broad downturn in economic activity.
Gross domestic product (GDP) · Unemployment rate · Business cycle · Monetary policy · Fiscal policy · Inflation