what is recession

A recession is a significant, widespread, and prolonged downturn in economic activity. It is generally agreed that a recession occurs when there is a period of reduced output and a significant increase in the unemployment rate. While there is no official definition of a recession, it is generally recognized as a period of decline in economic activity. In the United States, a recession is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales". The European Union has adopted a similar definition, while in the United Kingdom, a recession is defined as negative economic growth for two consecutive quarters. Economists measure a recessions length from the prior expansions peak to the downturns trough. Governments usually respond to recessions by adopting expansionary macroeconomic policies.