Which economic metric is a primary indicator of a recession?

A decline in Gross Domestic Product (GDP) is a primary indicator of a recession because GDP measures the total economic output of a country over a specific period. When GDP contracts for two consecutive quarters, it is often interpreted as a sign that the economy is experiencing reduced economic activity, leading to less production, lower sales, and potential job losses. This decline reflects a slowdown in consumer spending, business investment, and overall economic growth, making it a crucial metric for economists and policymakers in assessing the health of an economy.

In contrast, a rise in employment or an increase in consumer spending would typically indicate economic growth, and stable income levels suggest a steady economy rather than a contracting one. Therefore, a decline in GDP serves as a clear signal that a recession may be occurring.