Welcome to the Investors Trading Academy talking glossary of financial terms and events.
Our word of the day is “Recession”
Recession is a slowdown or a massive contraction in economic activities. A significant fall in spending generally leads to a recession. Recession is a slowdown or a massive contraction in economic activities. A significant fall in spending generally leads to a recession.
A recession is a downturn in a nation’s economic activity. The consequences typically include increased unemployment, decreased consumer and business spending, and declining stock prices. Recessions are typically shorter than the periods of economic expansion that they follow, but they can be quite severe even if brief. Recovery is slower from some recessions than from others. The National Bureau of Economic Research which tracks recessions, describes the low point of a recession as a trough between two peaks, the points at which a recession began and ended — all three of which can be identified only in retrospect.
The Conference Board, a business research group, considers three consecutive monthly drops in its Index of Leading Economic Indicators a sign of decline and potential recession up to 18 months in the future. The Board’s record in predicting recessions is uneven, having correctly anticipated some but expected others that never materialized.
By Barry Norman, Investors Trading Academy – ITA
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