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.


In the first quarter of 2013, the eurozone continued to witness an economic contraction. The gross domestic product (GDP) of the 17-nation region declined 0.2%. This decrease in the GDP marked the sixth straight quarter of economic contraction in the…

The U.S. Midwest is in the midst of the most severe drought in 50 years. The brutal conditions are destroying corn, wheat, and soybean crops, sending the prices of many agricultural commodities rocketing higher—another knife cutting into consumer confidence and…

I wrote a couple of months ago in these pages about the fact that the British economy officially entered a recession as of the first quarter of 2012, when the country released its GDP growth numbers. While Britain expected its…

U.S. durable good orders are an important measure of the economic recovery, because they focus on big-ticket items purchased by businesses and consumers, which are meant to last at least three years; a sign of business and consumer confidence. The…

I have been arguing in these pages for months now that the continued contraction among states and municipalities in the U.S. would keep the unemployment rate high in this country. The U.S. Bureau of Labor Statistics estimates that the government…

This past month of May was the turning point for the global economy. Just look at these statistics and you can’t help but think the bottom is falling out again… Manufacturing sank to a three-year low in May for the…

The personal savings rate in American has unexpectedly fallen back to its lowest level since December 2007, the early stages of the economic crisis. On the surface, consumers are getting themselves into trouble by taking on more debt. However, a…

Am I missing something? I can’t seem to find the U.S. economic recovery I’m reading and hearing about in the media. We all know consumer spending in the U.S. accounts for 70% of Gross Domestic Product (GDP). If the U.S. economic…

On the topic of economic recovery, let’s check in on how the economies of China and the remainder of the world are faring. To be blunt, as if Europe wasn’t enough to worry about, news out of Asia is pointing…

Two different parts of the world, two very different ways countries are dealing with their economic contractions… In the U.S. yesterday, Eric Rosengren, President of the Federal Reserve Bank of Boston, said that the Fed should do more to bring…

— by Inya Ivkovic, MA Reviving the global economy is not going to be easy. But governments and central banks must not lose their focus, even if the general public insists otherwise. Central banks and governments around the world have…