What is a recession?

A common rule of thumb defines a recession as two consecutive quarters of falling gross domestic product. In the United States, however, the official call is made by the National Bureau of Economic Research, which looks at a broad range of indicators such as jobs, income and industrial production. Recessions can be triggered by financial crises, sharp rises in interest rates, oil price shocks or sudden events like pandemics. The Great Recession of 2007 to 2009 followed the collapse of the US housing market and was the worst downturn since the 1930s. The COVID-19 recession in 2020 was the shortest on US record, lasting just two months.