What is the definition of a recession?

A recession is defined as a period of two successive quarters ( ie 6 months) that experience a downturn in economic growth. This is normally visible in GDP, employment figures, industrial production and retail sales.

What’s the difference between a recession and a depression?

Depression is a general word for an extended period of economic recession. America suffered the Great Depression in the 1930’s.

How long does a recession last?

The NBER states a recession is a period of decline “lasting more than a few months“. An economy is said to contract at the start of a recession as part of the natural business cycle. History shows that this cycle may be short or continue for years, risking a depression.

How will I personally be affected by a recession?

Periods of low US economic growth are risky times for job security. Large companies may lay off employees in a move to reduce costs.

What are the main indicators of a recession?

Recessions are always impossible to predict reliably but here are some indicators which may predict potential turmoil ahead:

• an unexpected drop in the stock market
• the rising price of gold
  
• the frequency of the word ‘recession’ in the media
• falling housing market

Past indicators of recessions in the USA are the taxi test, the hemline test and the number of cranes on the skyline.