Recession

A recession is when a country's economy shrinks for at least six months—meaning people and businesses are producing and spending less overall. You'll hear economists and news anchors talk about recessions because they affect your job prospects, how much your investments are worth, and whether companies are hiring or laying people off. During a recession, stock prices often fall because companies earn less profit, unemployment rises, and consumer confidence drops. For example, if TechCorp announces layoffs because fewer customers are buying their products, that's often a sign the economy is weakening. Recessions are a normal part of economic cycles, but they can feel painful in the moment.