Defining Recession (CRS Report for Congress)
| Release Date |
Sept. 30, 2024 |
| Report Number |
IF12774 |
| Report Type |
In Focus |
| Authors |
Lida R. Weinstock |
| Source Agency |
Congressional Research Service |
Summary:
Over time, an economy fluctuates between periods of
above- and below-average short-term growth. These
fluctuations are referred to as the economy’s “business
cycle.” As the economy moves through the business cycle,
gross domestic product (GDP) and several additional
economic indicators rise and fall. Policymakers may seek to
act preventatively or swiftly when recessions occur, making
the identification of recessions a critical component of
fiscal and monetary policy.
This In Focus discusses how U.S. recessions are officially
defined, what rules of thumb economists and policymakers
use to gauge the health of the economy, and how accurate
those unofficial measures tend to be. For further discussion
of the business cycle and the economy, see CRS In Focus
IF10411, Introduction to U.S. Economy: The Business
Cycle and Growth, by Lida R. Weinstock.
