HOW TO SENSE RECESSION

PEAK - Point where recession begins

TROUGH - Point where recession ends

Following the trough, the economy expands again towards another peak. Economist call the period of time between two peaks a BUISNESS CYCLE.

There is no strict defination for recession. Different people consider different factors when making the assessment.

Some economist and journalist define a recession as two consecutive quaters (3- momth financial period in the year) in which the GDP (GROSS DOMESTIC PRODUCT) decreases.

GDP is the value of all the reported goods and services produced by people and institutions operating in a country.

An overall decrease in the value of goods and services indicates that demand has decreased in most markets. If this is the case, its a good bet that companies have laid people off, so unemployment is up. Usually the stock market is also in bad shape when overall value is decreasing.

In general Gdp is a pretty good indicator of overall state of the economy.