What is a recession?

What a recession is, and who decides

A recession is a significant decline in economic activity that spreads across the economy and lasts more than a few months. Production, jobs, incomes and sales fall together, in most industries at once. The stretch between two recessions, when the economy grows, is called an expansion.

The US government has no official definition. The dates everyone uses come from the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), a private, non-partisan research organization. The committee picks two months: the peak, when activity was highest, and the trough, when it was lowest. The recession runs from the month after the peak to the trough.

What the committee weighs

It looks mostly at monthly data: employment in the payroll and household surveys, personal income excluding government transfers, consumer spending and business sales after inflation, and industrial production. Quarterly GDP counts too, as one measure among several.

“Two quarters in a row of falling GDP” is a popular rule of thumb, not the definition. In 2022 the first estimates showed GDP falling in two quarters, yet payroll employment grew by 2.54M jobs in the first half of the year, and the NBER dated no recession. The 2001 recession, on the other hand, has no two consecutive quarters of falling GDP in today's data.

The committee announces its dates only when the data leave no doubt — months, sometimes more than a year, after the turn. A recession is usually under way, or even over, before it is official.

Every US recession since 1857

Each line below is a decade and each red stripe a recession, from the one that followed the peak in June 1857 to the latest. In the 19th century the economy spent much of its time shrinking: 48% of the months from June 1857 to the end of 1899 fell in a recession. The longest on record, from October 1873 to March 1879, the Long Depression, lasted 65 months; the second longest, 1929–33, the Great Depression, 43 months.

Since 1945 recessions have come less often and ended sooner. A new one began every 6.2 years on average, against every 4.0 years before, and the economy spent 13% of the months in recession, against 42% before 1945. The 2010s were the first whole decade without a single month of recession.

How long recessions and expansions last

Since 1945 the average recession has lasted 10.2 months, from 2 months (2020) to 18 months (2008–09). The 21 recessions before 1945 lasted 21.2 months on average.

Expansions stretched out even more: 64.2 months on average since 1945, about 5.3 years, against 28.9 months before. The longest on record ran 128 months, from June 2009 to February 2020. The current expansion began in May 2020 and had lasted 78 months by October 2026 — longer than all but 5 of the 33 completed ones.

The latest recession, and today

The latest recession in the NBER's table followed the peak in February 2020 and ended with the trough in April 2020: 2 months, the shortest on record. Payroll employment fell by 21.9M (−14.4%) from February 2020 to April 2020, unemployment rose from 3.5% to 14.8% in April 2020, and the S&P 500's monthly average fell by 19%. Payrolls were back at their pre-recession high in June 2022, 28 months after the peak.

Since then the economy has been in an expansion as far as the NBER's table goes (checked November 9, 2026). In October 2026 unemployment was 4.1%, against 4.4% in September 2025, and payroll employment changed by +885K jobs from October 2025 to October 2026. The committee dates turning points only in hindsight, so monthly numbers show the direction, not an official verdict.

What happens to jobs and stocks in a recession

Below is every recession since 1948 on its own card, from a year before the peak to 3 years after it. Unemployment rose by 2.2 points at the least (1980) and 11.3 at the most (2020); the median rise was 3.6 points. The biggest loss of jobs, 21.9M or 14.4% of all payroll jobs, came in 2020.

Stocks usually moved first: in 11 of the 12 recessions the S&P 500 began its fall before the economy's peak. Its deepest fall around each recession ranged from −10% (1960–61) to −51% (2008–09), −18% in the median case. And in 6 of them the index stood higher at the trough than at the peak: much of the fall came before the recession began, and the rebound before it ended.

Stocks turn first, jobs last

Line the recessions up at their end, the trough. The S&P 500 hit its low before the recession was over in all 12, a median 4 months earlier. Unemployment peaked in the recession's last month or later in all 12 — up to 19 months after the trough (2001). By the time jobs come back, stocks have usually been rising for a while.