A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
In Depth
A recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. It impacts various aspects of the economy including jobs, consumer spending, and business profits. While often associated with job losses, a recession can also lead to lower interest rates and cheaper goods as demand falls. Understanding recessions helps individuals prepare for potential financial challenges.
Example
During a recession, many companies may lay off employees to cut costs, and consumers might reduce their spending on non-essential items.