According to Google, a recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP (Gross Domestic Product) in two successive quarters.
According to Investopedia, a recession occurs when there are two or more consecutive quarters of negative economic growth, meaning GDP growth contracts during a recession. When an economy is facing a recession, business sales and revenues decrease, which causes businesses to stop expanding.
What Causes A Recession?
According to Study.com here are some of the main causes of recession:
High-interest rates are a cause of recession because they limit liquidity, or the amount of money available to invest.
Another factor is increased inflation. Inflation refers to a general rise in the prices of goods and services over a period of time. As inflation increases, the percentage of goods and services that can be purchased with the same amount of money decreases.
Reduced consumer confidence is another factor that can cause a recession. If consumers believe the economy is bad, they are less likely to spend money. Consumer confidence is psychological but can have a real impact on any economy.
Reduced real wages, another factor, refers to wages that have been adjusted for inflation. Falling real wages means that a worker's paycheck is not keeping up with inflation. The worker might be making the same amount of money, but his purchasing power has been reduced.
Are we heading for another recession soon, and if so when?
When Is The Next Recession?
Soon.
According to Bloomberg.com, coronavirus has spurred what will likely be the worst recession in generations as the U.S. economy grinds to a halt and millions lose their jobs.
Because of the impact of the virus, people are being forced either out of work or to work from home. Those losing their jobs were working in low demand industries like retail and travel.
People are being encouraged to stockpile food, toiletries, and medical materials such as face masks to protect themselves from the virus. Also with social distancing, industries such as professional sports are struggling to put on events, thus they are also losing money.
Because of this downturn and a lack of confidence to invest in an unsteady market, we are already turning into a bad recession.
So what's next?
What's Next?
It will pass and the economy will be better than ever after the virus passes.
When the economy improves you will want to wish you started a business that can take off.
There are many businesses you can start which are recession-proof, managed online.
These types of businesses can make you up to 6-7 figures online every year!
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