Recessions

Prolonged yield curve inversions can predict recessions, but even brief inversions can cause investors to react with knee-jerk reactions.

Recessions are sustained downturns in the economy. They’re significant, widespread, and there’s no single, surefire way to define or predict them.

Recessions are caused by imbalances in the market and are guaranteed to happen in capitalist systems, but predicting them is a complex task.

From 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.

Social 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.

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.

Many countries suffered through a depression in the 1930s that the First World War, the US stock market crash, and an economic downturn in Germany turned into an international crisis.

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.

The US Great Depression was felt globally, but the severity and length of different countries’ economic downturns varied. For instance, Japan was the first country to exit its depression.

One hairstyle trend is seen as a recession indicator: people letting their hair grow darker roots instead of frequently splurging on expensive blonde highlights.