Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Economic Contraction

An economic contraction, often referred to as a “recession,” officially occurs when a country experiences two consecutive quarters of decreasing gross domestic product (GDP). An economic contraction can also be viewed as a general slowdown in a country’s economic activity; a period when the unemployment rate is rising, corporate profits are decreasing, personal income is declining, and bankruptcies are also on the rise.

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