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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Find the latest research on the effect of recessions in countries around the world, from predictions to explanations.
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High-frequency economic indicators suggest the Chinese economy has yet to recover from the coronavirus, supporting anecdotal evidence of extended factory closures. Depending on how quickly activity returns to normal, the Chinese economy could contract at a double-digit pace in the first quarter, pushing annual growth down to just 3%.
The manufacturing mini-cycle downturn might be about to end, with the current industrial recession out of sync with the fundamental anchors of retail sales and financial stress. History suggests the manufacturing sector tends to overshoot but will eventually be dragged back up.