recession


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Recession

A temporary downturn in economic activity, usually indicated by two consecutive quarters of a falling GDP. The official NBER definition of recession (which is used to date U.S. recessions) is: 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. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough. Between trough and peak, the economy is in an expansion. Expansion is the normal state of the economy; most recessions are brief and they have been rare in recent decades. The start and end dates are determined by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER). It is a popular misconception that a recession is indicated simply by two consecutive quarters of declining GDP, which is true for most, but not all recession. NBER uses monthly data to date the start and ending months of recessions.

Recession

A prolonged economic retraction. While there is no technical definition of a recession, they are conventionally defined by two or more consecutive quarters of negative GDP growth. Recessions are marked by declines in productivity and investment and high unemployment. See also: Depression.

recession

An extended decline in general business activity. The National Bureau of Economic Research formally defines a recession as three consecutive quarters of falling real gross domestic product. A recession affects different securities in different ways. For example, holders of high-quality bonds stand to benefit because inflation and interest rates may decline. Conversely, stockholders of manufacturing firms will probably see company profits and dividends drop.
Case Study After nearly a year of falling commodity prices, rising unemployment, increasing personal and corporate bankruptcies, falling stock prices, and declining public confidence, the National Bureau of Economic Research made it official and on November 26, 2001, declared a recession. The announcement wasn't a surprise to hundreds of thousands of people who had lost their jobs and an even greater number of investors who had experienced substantial losses in the stock market. The bureau's Business Cycle Dating Committee of six academic economists determined the recession commenced in March 2001, when economic activity stopped growing. Although many economists use declines in gross domestic product to define a recession, the NBER Dating Committee examined employment, industrial production, manufacturing and trade sales, and personal income. The country's last previous recession lasted eight months and ended in March 1991. The subsequent ten-year period of uninterrupted growth between March 1991 and March 2001 was the longest in America's history.

Recession.

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.

recession

see BUSINESS CYCLE.

recession

a 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.

recession

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.

References in periodicals archive ?
Corporate insiders have sold an average of $600 million in stock per day in the month of August, suggesting executives and institutional investors may be losing confidence in stocks all together due to recession concerns.
is on a high probability phase of a recession. What factor will spark the next recession remains a mystery.
Hatzius noted Thursday that the recent budget deal had significantly diminished the risk of a fiscally induced recession.
According to the survey, 45 percent of home shoppers feel at least slightly more optimistic about homeownership after the 2008 recession. Less than a quarter - 22 percent - feel at least slightly more pessimistic about homeownership, while 33 percent reported no impact on their feelings about homeownership.
We carried out two different analyses on these metrics to get different insights into the recession readiness of companies.
For example, typically, investors seek higher yield in an inflationary era and take refuge in Treasuries when fears of a recession rise (lower yield), all else equal.
The issue of adverse consequences from entering the labor market during a recession is one that is relevant to all demographic and socioeconomic groups, as it affects all labor market entrants in both the short and long run.
One final possible cause of recession is the financial sector.
Conclusions: Pre-existing gingival recession was not adversely affected by brushing with an O-R or manual toothbrush over 3 years.
In this article, I use two approaches to determine whether the seven states of the Tenth District are in a recession. The first approach is helpful for identifying regional recessions retrospectively over the last four decades, while the second approach is more helpful for identifying regional recessions in real time.
With an additional 11 years of data since the indexes were first published, and with the Great Recession behind us, I explore a method for using our indexes to pinpoint the onset and end dates of state business cycles and assess its results: What do the state coincident indexes now tell us about state cycles?