Recession
A significant decline in economic activity lasting more than a few months, typically defined as two consecutive quarters of negative GDP growth.
What is Recession?
A recession is a period of significant decline in general economic activity, typically defined as two consecutive quarters of negative real GDP growth. In the United States, the National Bureau of Economic Research (NBER) is the official arbiter of recession dates, using a broader set of indicators including employment, income, industrial production, and wholesale-retail sales — not solely GDP. Recessions are associated with rising unemployment, reduced consumer spending, declining business investment, and falling corporate profits. The U.S. has experienced 12 recessions since World War II, with an average duration of approximately 11 months.
Example
The COVID-19 recession began in February 2020 and lasted only two months — making it the shortest recession in U.S. history. Real GDP contracted at an annualized rate of 31.4% in Q2 2020, the steepest quarterly decline on record, before rebounding sharply as pandemic restrictions lifted.
Source: NBER — Business Cycle Dating