A recession is the term used to describe a fall in economic activity and negative growth for a prolonged period, usually longer than two consecutive quarters. Arguably, the economic metric with the most weighting is GDP (Gross Domestic Product); continued decline of GDP is one important indicator of an economic recession. Other indicators include income stagnation and high unemployment rates, a fall in consumer demand, and reduced goods manufacturing.
Recessions are considered a normal part of a capitalist economy, they are part of the business cycle. Despite this, there is still no clear way of predicting economic recessions beyond monitoring the aforementioned factors.
Financial crisis, dramatic changes to external trade, and the popping of an economic bubble are all events which can trigger a recession. Each of these events can inhibit spending to the point of economic torpor.
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The cracks are showing and everybody wants to understand what could cause the US to break. Here's why we think trade troubles and corporate concerns are the main issues. I also explain why traditional recession indicators may be false prophets this time around...