Recession

Definition

A significant, broad decline in economic activity lasting more than a few months. Two consecutive quarters of falling real GDP are a common rule of thumb, but official assessments may consider other indicators.

A recession typically shows up across several parts of the economy, such as employment, production, and spending. These measures can turn at different times. Looking at them together helps economists distinguish a broad downturn from weakness in a single industry.

Example

Over several months, factories produce less, businesses cut jobs, and households spend less after adjusting for inflation. Together, those declines could indicate a recession.