Factories cut shifts, retailers mark down stock, and hiring slows to a crawl. Those are the everyday signs of a recession, a period when an economy contracts across many sectors for several months. Output falls, measured by indicators such as gross domestic product, while business investment and consumer spending pull back at the same time.

Economists look for a broad decline rather than a single weak industry. Job losses tend to follow, though often with a delay, and household confidence weakens. Credit can tighten as lenders grow cautious, which in turn reduces borrowing for homes, cars, and expansion plans.

Governments and central banks usually respond with lower interest rates, public spending, or targeted support to stabilize demand. The length and depth vary widely: some downturns pass quickly, others leave lasting scars on employment and balance sheets.

Common features

• Falling output and sales across multiple sectors
• Rising unemployment and reduced hiring
• Lower investment and tighter credit conditions
• Policy measures aimed at stimulating demand