Personal Finance

What Is a Recession?

A recession is a significant, widespread, and lasting decline in economic activity, typically visible in falling output, employment, income, and spending. A common rule of thumb is two consecutive quarters of shrinking GDP, but in the US, recessions are officially dated by a committee of the National Bureau of Economic Research using a broader set of indicators.

Common Signs

Rising unemployment, falling retail sales and industrial production, and declining business investment.

Recession vs. Depression

A depression is an especially severe and prolonged downturn.

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🔗 Related Terms

Bear Market Unemployment Benefits Stagflation Emergency Fund

More Personal Finance Terms

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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.