Which of the following best describes a recession?

A recession is best defined as a significant decline in economic activity across the economy, lasting more than a few months. This definition encompasses a broad range of indicators, including decreases in GDP, income, employment, manufacturing output, and retail sales. When economic activity contracts, it often leads to companies reducing production, laying off workers, and decreasing consumer confidence, which further exacerbates the downturn.

The characteristics of a recession typically manifest through negative growth in real GDP for two consecutive quarters, rising unemployment rates, and falling consumer spending. This decline indicates a widespread downturn, contrasting with periods of economic expansion where growth and employment rates usually rise.

In contrast, rapid economic growth, temporary increases in employment, and enduring rises in GDP reflect the opposite economic conditions—expansion rather than contraction. Thus, the significant decline in economic activity, as described, aptly characterizes the essence of a recession.