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Recession

ri-SESH-un /rɪˈsɛʃən/

nounC1GRETOEFLIELTS

formalbusinesseconomics

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Recessions are characterized by widespread economic contraction, including reduced consumer spending, business investment, and employment. They are a normal part of the business cycle but can be severe.

The story behind the word. The word 'recession' comes from the Latin 'recessio,' meaning 'a going back' or 'a retreat.' This, in turn, comes from the verb 'recedere,' meaning 'to go back.' In economics, it perfectly describes a period where the economy 'goes back' or 'retreats' from its previous growth, shrinking instead of expanding. It's like the tide receding from the shore.

Word relationships

downturn: A more general term for a decline in economic activity, often less severe or specific than a 'recession'.
slump: Implies a more severe or prolonged economic decline than a typical recession.

boom: A period of rapid economic growth and prosperity.
expansion: A period of increasing economic activity.

Commonly confused with

Depression: A depression is a more severe and prolonged recession, characterized by a much larger decline in economic activity and higher unemployment.

Word family

recede (verb): To go or move back or further away from a previous position.

Collocations

deep recession
mild recession
global recession
economic recession
enter a recession
recover from a recession

Example sentences

"Many economists predict a global recession if current geopolitical tensions escalate." Economic news report.
"The 2008 financial crisis triggered a deep recession that affected millions of households." Historical event.
"Governments often implement stimulus packages to help an economy recover from a recession." Government policy.

Memory hook

A RECESSION is when the economy RE-CEDES, pulling back and shrinking. Economy shrinks back

When not to use

Do not use 'recession' for a minor economic slowdown or a downturn in a single industry. It implies a broad and significant contraction across the entire economy.

Fun facts

In the US, the official declaration of a recession is made by the National Bureau of Economic Research (NBER), not solely based on the two-quarter GDP rule.