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RecessionsStemming from the Latin word “recessus” (meaning “a retreat”), recessions are sustained periods of declining activity in a country’s economy. During a recession, unemployment rises while economic output falls across a large swath of industries. Recessions are inevitable in modern economies, with one occurring about every six to seven years. One common definition of a recession is when a country logs two consecutive quarters of shrinking gross domestic product, but in practice, these economic phenomena are more complex. The US has been through 34 recessions since 1854, according to the National Bureau of Economic Research. But over time, they’ve become both shorter and less frequent. Since 1980, the US has only experienced six recessions.Explore Recessions

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There's no single definition of an economic recession, though recessions are commonly identified by two consecutive quarters of shrinking gross domestic product.Because recessions are recognized when a wide array of economic factors like falling GDP and high unemployment converge, they are often officially recognized after the fact. CNN The men’s underwear index predicts recessions based on men’s underwear salesInternet users have been using some nontraditional indicators to predict whether a recession is imminent, including the return of so-called “recession pop.” Marketplace The US has been through 34 recessions since 1854From 1855 to 2020, the average US recession lasted for an average of 17 months. But in the 20th and 21st centuries, the average recession length has shortened, decreasing to 14 months. USAFacts Recessions are considered to be inevitable by modern economic standardsRecessions are caused by imbalances in the market and are guaranteed to happen in capitalist systems, but predicting them is a complex task. McKinsey & Company The Sahm rule attempts to predict recessions based on unemployment trends.The Sahm rule states that when the three-month average US unemployment rate rises by 0.5 percentage points from a 12-month low, the US is already in a recession. The rule was created in 2019 by the economist Claudia Sahm. However, some argue that this economic indicator may be overstated due to today's unique labor market dynamics. See a visual that explains the Sahm rule here. Visual Capitalist Passed in 2010 in the fallout of the Great Recession, the Dodd-Frank Wall Street Reform and Consumer Protection Act was the most significant financial reform since the Great Depression. Council on Foreign Relations BlackRock played an integral role in the Federal Reserve's response to the Great Recession, managing about $30B of hard-to-sell Bear Stearns assets on behalf of the New York Fed. Reuters American International Group, one of the largest insurance companies in the world, received $182B from the federal government—the largest of any bailout in the wake of the Great Recession. Investopedia In March 2008, Bear Stearns was the first major bank to collapse in the Great Recession—leading to panic across the entire global financial system. Council on Foreign Relations Before the Great Recession, lax requirements to get a mortgage resulted in mass defaults that left nearly 19 million homes vacant. USAFacts How a failed investment bank almost became the name of a whiskey lineIn the fallout of the Great Recession of 2008, Barclays bought several assets from the failed investment bank Lehman Brothers in a fire sale and maintained the company's trademark, despite the bank's collapse. Tiger Lily Ventures attempted to launch a whiskey line parodying the name, but the product was rejected in court due to questions over Barclays' maintenance of the trademark. American University Read about why bans on short selling are a controversial policyGenerally, short selling is legal, but regulations often restrict short positions when a stock has experienced a sharp price decline (more than 10% in one day). However, negative feedback loops in times of financial crisis have given short selling a bad reputation. The government has temporarily banned short selling during previous market downturns—like The Great Recession of 2008 and the early months of the COVID-19 pandemic—but experts argue whether those bans actually improved market stability or just distorted prices. Vox If you think AI is coming for your job, experts suggest adding more money to an emergency savings fund ahead of time. The Motley Fool Beyond oil, the Iran war is pushing up costs on fertilizer, prescriptions, and mortgages, tooGas is up 27% since fighting began, but the Strait of Hormuz also carries a third of the world's fertilizer, petrochemicals used in generic drugs, and helium for semiconductor manufacturing. Mortgage rates have climbed back above 6.4%, and economists warn $130 oil could tip the U.S. into recession. Investopedia American Express created 'Small Business Saturday' in 2010As small businesses across the US were still reeling from the Great Recession, American Express came up with the idea of "Small Business Saturday" to help drive consumer spending to small businesses. Small Business Saturday is the day after Black Friday. In 2011, the Senate passed a resolution supporting Small Business Saturday, and, since then, it's become nationally recognized. American Express is targeting Gen Z, who are generally less risk-averse than older generationsUnlike Millennials, who grew up during the Great Recession in 2008, Gen Z has a higher risk appetite and has grown up with more gamified spending platforms, like online gambling and prediction markets. Analysts say Gen Z's risk appetite makes them prime targets for credit card companies like American Express that can sell younger customers on large benefits in exchange for annual fees. Fortune What is quantitative easing?Quantitative easing was a relatively new method the Federal Reserve used to curb deflation during the Great Recession. In this process, a central bank digitally creates money that is used to purchase assets, usually government bonds. This lowers returns on low-risk bonds, encouraging investors to put their money in high-risk, short-term stocks, and moves money through the system. The Telegraph The Federal Reserve fought the Great Recession primarily with quantitative easing and repurchasing agreements. Marginal Revolution University Read former Fed chair Ben Bernanke's 2002 speech about preventing deflationVery low inflation rates in the early 2000s in the United States and a worsening recession in Japan sparked some domestic concern over the threat of deflation. While Bernanke wasn't Chair at the time of the speech, he emphasized the Fed's role in preventing deflation. Federal Reserve Board 'Good deflation' happens when prices naturally track with supply, meaning prices change graduallyThis tends to make products and services more affordable and normalizes the standard of living. Bad deflation usually happens when there are sudden changes to either supply or demand. Near-zero [interest rates helped create the real estate bubble that sparked the Great Recession when it crashed](https://www.youtube.com/watch?v=LMo9mD8j7IA&t=91s) Because deflation distorts the value of money, deflation is particularly harmful for borrowers. Low interest rates made it easy for businesses and everyday people to take on enormous debt, which exacerbated the effects of the recession. Foundation for Economic Education The Great Depression is one of history's most notable periods of deflationThe stock market crash of 1929 helped trigger a period of deflation in the United States by creating a drastic decrease in the total money supply. Because of the United States' central role in the world economy, virtually every single country was impacted by the recession. Casual Economics Falling demand and lower costs of production cause deflation"Falling demand" refers to anything that changes someone's willingness to spend money on goods and services. Global recessions, fears of a worldwide recession, and a fall in the money supply are all factors that could lead to falling demand. Likewise, lower production costs allow companies to increase production, which can lead to a surplus in supply. Economics Help Amid the aftermath of Watergate, Gerald Ford declared that the state of the union was 'not good'In his first State of the Union in January 1975, President Ford departed from the usual optimism, bluntly acknowledging recession, inflation, and public distrust as the country worked to recover from Nixon's resignation and the Watergate scandal. C-SPAN Bob's Discount Furniture was born from a motorcycle accident Founder Bob Kauffman crashed his motorcycle and nearly required a leg amputation. After sleeping on a waterbed appeared to help his recovery, Kauffman decided to sell the beds. His authentic and frugal approach (and goofy commercials) led to quick growth. The Quota Viral pop artists create systems of participation, not just musicMusicologist (and Swift expert) Paula Clare Harper weighs in on the factors that make music go viral. Tracks designed for shareability that feed well into content algorithms on streaming platforms are able to grow in popularity, with traditional human gatekeepers sidelined. Big Brains US homeownership rates declined from the start of the Great Recession through 2016. USA Facts When consumers think an economic downturn is looming, the 'lipstick index' economic theory argues that sales of more affordable luxury items (such as lipstick) go up. Lipstick? Skyscrapers? Exotic dancers? You won't believe the wacky methods people have come up with to predict a recession! Two Cents Indoor rock climbing gyms have doubled in a decade in the USThe business saw a jump in growth amid low real estate costs after the 2008 Great Recession. The sport's culture has shifted from serving misfit loners to more family-friendly spots. Hustle The United States faces a sizeable teacher shortageTeacher vacancies have surged since 2017, with each year opening more positions than hires. Educators are quitting in record numbers, citing low pay and burnout. Today, there are 567,000 fewer education professionals than before the pandemic. National Education Association Experts don't believe upbeat tunes, called 'recession pop,' are legitimate recession indicatorsSocial media users have begun deeming pop music by the likes of Kesha and Katy Perry a "recession indicator" as they try to predict the next economic downturn. Vox A V-shaped recovery from a recession is the most common kindWhen charted, recession recoveries resemble letters including V, U, W, L, and K. For instance, an L-shaped recovery involves a steep decline that slowly reverses. Financial Pipeline Roughly $5T of stimulus money flooded the economy during the pandemicRecessions can last anywhere from months to years. To encourage economic growth, governments use policy levers such as lowering interest rates or introducing a stimulus. Economists credit massive stimulus funds for helping the economy quickly recover from a recession during the COVID-19 pandemic. The New York Times So-called 'recession blondes and brunettes' skip hair appointments to save moneyOne hairstyle trend is seen as a recession indicator: people letting their hair grow darker roots instead of frequently splurging on expensive blonde highlights. Vogue The clearest sign of a recession is a steady increase in job losses and high unemployment.The National Bureau of Economic Research (NBER) looks at six key economic indicators, including industrial production, to determine when the economy is experiencing a recession. CBS News An inverted yield curve has preceded every recession that’s occurred in the last 50 yearsProlonged yield curve inversions can predict recessions, but even brief inversions can cause investors to react with knee-jerk reactions. CNBC One signal that a recession has become a depression? When GDP declines more than 10%There’s no single definition for recessions or depressions, but both are marked by sustained periods of declining economic activity. Depressions are more severe than recessions. International Monetary Fund A recession is commonly defined as two consecutive quarters of shrinking GDP, but in practice, these economic phenomena are more complex.Recessions are sustained downturns in the economy. They’re significant, widespread, and there’s no single, surefire way to define or predict them. Investopedia The Mystery of the Declining U.S. Birth Rate | EconofactThe rate of births in the US has dropped by 20% in the last two decades after 30 years of relative stability. After the Great Recession, the birth rate across all demographics began to drop and has not recovered since, and no single factor has been identified as the key cause. Econofact The national debt is the total amount the US government owes its creditorsThis US Treasury page explains what the national debt is, how it accumulates from annual deficits, and why rising debt can affect interest costs, fiscal flexibility, and long-term economic stability. Treasury.gov Subprime lending practices, which fueled the housing bubble, surged after 2000.The early 2000s were a prosperous period for the housing market, until some lending practices eventually destabilized it, leading to banks collapsing and people losing their homes. HISTORY Key moments that shaped the national debt include the Civil War, both World Wars, the 2008 recession, and the COVID-19 pandemicThe US national debt has grown alongside wars, recessions, and policy shifts—from $75M after the Revolutionary War to over $34T today. This visual timeline walks through key moments that shaped the debt. 1440 Who is Michael Burry?Michael Burry is best known for shorting the mortgage bond market in 2007. Before the Great Recession, the legendary investor’s firm took a stake in GameStop and argued the company was being undervalued in 2019. Learn more about Burry’s historical impact on markets here. TheStreet Why there's a snack recessionInflation and economic uncertainty have driven many Americans to make cuts to their snack budgets, according to reports from major food manufacturers like General Mills, JM Smucker, and Campbell's. Major retailers have also observed lower-income consumers cutting back on nonessentials due to the macroeconomic environment. Axios One of the driving forces behind an increase in pay transparency laws is their ability to help close the gender pay gap. Since 2018, pay transparency laws have been enacted in more than a few states and cities across the US. But what's driving the trend, from a legal perspective? This law review article attempts to answer that question, citing factors such as the Great Recession and the gender pay gap—click here to learn more. University of Cincinnati Law Review Blog In a survey of US Gen Z workers, 53% were freelancing for at least 40 hours per weekOverall, Gen Z has a pretty different attitude about work from previous generations, partly because of the economic hardship they’ve witnessed being born into the Great Recession and coming of age during the COVID-19 pandemic. MSN The Occupy Wall Street protests lasted 59 daysAfter the 2008 recession, one of the main slogans of Occupy Wall Street was, “We are the 99%,” alluding to the wealth disparity between America’s wealthiest 1% of all households and the rest of the country. CNBC Television Read about the evolution of the S&P 500 and its recession recoverySince the S&P 500 is considered a bellwether index (meaning it represents the health of the US economy), its value is important for investors in both bull and bear markets. The S&P 500 has been impacted by recessions and downturns, from the 1970s oil crisis to the dot-com crash of the early 2000s. Investopedia Visualizing decades of stock market performanceStock markets and the indexes that track their biggest companies tend to ebb and flow, with long growth periods punctuated by shorter recessions. Track the 60-year history of one of the most common stock market indexes, the S&P 500, with this data visualization. The chart highlights the long-term durability of markets despite appearance of short-term volatility. Visual Capitalist Total student debt has ballooned to $1.7T, up almost 150% since the Great RecessionWhile the burden falls across roughly 43 million Americans, the debt load itself is not uniform—millennials and those pursuing graduate or professional degrees represent an outsized portion of loans. NerdWallet Disinflation, a decrease in the rate of inflation, is different from deflationDisinflation happens when prices are still going up, just at a slower rate. Prolonged disinflation is also often accompanied by a recession, making it painful for consumers. Federal Reserve Bank of St. Louis

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