When the Engine Stalls

A recession means a broad, significant decline in economic activity. People often use two straight quarters of falling GDP as a quick rule of thumb, but the US business-cycle dating authority, the National Bureau of Economic Research, uses broader evidence such as employment, income, spending, and production. The 2008 recession wiped out nearly $19 trillion in household wealth in the United States alone.

Recessions mean job losses, business failures, and shattered confidence. The psychological impact often outlasts the economic one — people who lived through severe recessions save more and spend less for decades afterward, fundamentally changing their relationship with money.