recession(redirected from Economic downturn)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia.
Broadly defined, a recession is a downturn in a nation's economic activity. The consequences typically include increased unemployment, decreased consumer and business spending, and declining stock prices.
Recessions are typically shorter than the periods of economic expansion that they follow, but they can be quite severe even if brief. Recovery is slower from some recessions than from others.
The National Bureau of Economic Research (NBER), which tracks recessions, describes the low point of a recession as a trough between two peaks, the points at which a recession began and ended -- all three of which can be identified only in retrospect.
The Conference Board, a business research group, considers three consecutive monthly drops in its Index of Leading Economic Indicators a sign of decline and potential recession up to 18 months in the future. The Board's record in predicting recessions is uneven, having correctly anticipated some but expected others that never materialized.
recessionsee BUSINESS CYCLE.
recessiona phase of the BUSINESS CYCLE characterized by a modest downturn in the level of economic activity (ACTUAL GROSS NATIONAL PRODUCT). Real output and investment fall, resulting in rising UNEMPLOYMENT. A recession is usually caused by a fall in AGGREGATE DEMAND and, provided that the authorities evoke expansionary FISCAL POLICY and MONETARY POLICY, it can be reversed. See DEFLATIONARY GAP, DEMAND MANAGEMENT.
Technically, two successive quarters of falling gross domestic product as judged by the National Bureau of Economic Research, a private nonprofit, nonpartisan research organization founded in 1920.Commonly,a time of general economic slowdown.