Financial Terms you may be hearing and what they mean...

Recession: a period of time in which a country’s economic activity declines for 2 or more quarters (6months) in a row. 

This is determined by looking at these 5 things:

GDP (the final output of all goods and services produced), income, employment, manufacturing, and retail sales.

Obviously with what is happening in the world right now this looks like a real possibility depending on how we manage the flattening of the curve.

Usually by the time the reports are published and analyzed we are already in a recession. 

Once people are back to work and the income, employment and manufacturing etc. return we will be out of a recession which is called:

Economic recovery - a business cycle following a recession that is determined by a period of improving business activity. This is when economic recovery, gross domestic product (GDP) growth remains positive as the economy rebounds.

What happens in between – this is where all those letters come in

L shaped Recovery – an economy that declines steeply and stays that way for an extended period.  This happened in Japan in the early 1990s

W shaped Recovery (Double Dip) – two economic recessions and recoveries that are back to back.  This happened in the US in the early 80’s.

U shaped Recovery – decline is gradual then a recovery starts slowly and picks up speed

V shaped Recovery - the economy experiences a sharp decline that is brief followed by a strong recovery

Sometimes when you know the meaning it’s not so scary!

Jodi