Stagnation is evident with higher unemployment and falling wages, making it difficult for individual workers to compete for jobs and wages.

During a period of stagnation, the stock market sees fewer gains, and stock, mutual fund, and ETF prices often hold steady or fall slightly during stagnation.

Stagnation represents a long phase of minimal economic growth, with GDP rising less than 2-3% annually. This economic slowdown can stem from cyclical downturns, unexpected economic shocks, or structural issues within an economy. During stagnation, high unemployment and stagnant wages prevail. Governments strive to reinvigorate growth through monetary and fiscal strategies, such as increasing infrastructure spending, reducing taxes, and lowering interest rates to stimulate economic activity and prevent prolonged stagnation.

• Stagnation is a prolonged period of slow economic growth as measured by gross domestic product (GDP) and may be accompanied by high unemployment.

• A recession is a significant and prolonged downturn in economic activity usually measured by two consecutive quarters of negative gross domestic product (GDP).