The business cycle describes the recurring pattern of expansion and contraction in an economy. It is not a smooth wave. It is messy, uneven, and unpredictable in timing. The cycle moves through four phases: expansion, peak, contraction, and trough. Then it starts again.

Expansions bring growth, hiring, and rising incomes. Peaks mark the high point before a downturn. Contractions, or recessions, bring layoffs and falling output. Troughs are the bottom, where recovery begins. A full cycle can last years or decades. The average post-war US expansion has lasted about five years, but some run much longer.

Economists debate what causes cycles. Shocks like oil price spikes, changes in interest rates, and shifts in consumer confidence all play a role. No two cycles look alike. Policymakers try to soften the blows with fiscal and monetary tools, but they cannot eliminate the cycle entirely. Timing is notoriously difficult.

Four phases

• Expansion: growth and rising employment
• Peak: maximum output before slowdown
• Contraction: falling output and jobs
• Trough: lowest point before recovery