business cycle

noun

Definition of business cycle

: a cycle of economic activity usually consisting of recession, recovery, growth, and decline

Examples of business cycle in a Sentence

Recent Examples on the Web

Many economists dispute his views, warning that low interest rates at this point in the business cycle could create dangerous bubbles that damage the economy with little notice. Damian Paletta, Washington Post, "Trump insists Fed should cut interest rates, even though economists say that’s usually a sign of ‘economic distress’," 19 July 2019 Many of the factors that contributed to the slowdown are long term, including slowing growth of the economy, less favorable tax treatment of home ownership, and reaching a mature phase in the business cycle. Phillip Molnar, San Diego Union-Tribune, "Econometer: Will housing market slowdown soon be over?," 5 July 2019 The Fed’s key benchmark interest is also low, relative to past business cycles. Jeanna Smialek, New York Times, "Trump Isn’t Alone. These Millennials on the Left Want Low Interest Rates, Too.," 12 June 2019 The good news is that the US corporate financial balance is positive at 1% of GDP and remains above its historic average, an unusually healthy position this deep into a business cycle expansion. Daan Struyven For Cnn Business Perspectives, CNN, "Corporate debt is rising, but it's safer than it looks," 10 June 2019 The main drivers of growth in the most recent business cycle were crude oil prices and the stock market, both of which saw a recovery after the winter months. Erin Douglas, Houston Chronicle, "Recent data points to healthy Houston economy: Dallas Fed," 4 June 2019 Yet this time around, although economic downturns are inevitable and part of the business cycle, the tech industry seems better suited to being a steady — and vital — pillar of the Bay Area’s economic structure. George Avalos, The Mercury News, "Tech employment in Bay Area reaches record highs," 14 June 2019 But what if the bond market's apparent malaise, the deepest curve inversion since 2007 (remember what happened then?) were signaling something darker and potentially longer lasting than a turn in the business cycle? CNN, "The bond market may be signaling something worse than a recession: Distrust in America," 4 June 2019 Heading into 2019, investors might want to broaden their range of holdings to include some active funds run by managers who have long tenures and have ridden out previous business cycles, and whose fees aren’t egregious. Suzanne Mcgee, WSJ, "Where to Put Your Money in 2019," 9 Dec. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'business cycle.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of business cycle

1858, in the meaning defined above

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Last Updated

16 Aug 2019

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The first known use of business cycle was in 1858

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More Definitions for business cycle

business cycle

noun

Financial Definition of business cycle

What It Is

The business cycle refers to an economy's periodic patterns of growth, recession, and recovery.

How It Works

An expanding economy is characterized by low unemployment, high productivity, and high consumer spending. When there is a decline in productivity, business revenues start to decline. Companies, consequently, reduce their workforces to cut costs. This results in rising unemployment and lower consumer confidence and spending, which are all hallmarks of a recession.

As the recession weakens, incremental increases in productivity and revenues lead to an economic recovery. The unemployment rate is gradually reduced as companies begin hiring again. A decreasing unemployment rate leads to an increase in consumer confidence and spending, and the economy begins expanding again.

Why It Matters

Business cycles are of particular interest to economists and policy makers. Government intervention is often introduced during recessionary periods in an effort to hasten recovery. By studying the historical patterns of economic expansion and contraction, it may be possible to understand and forecast future economic trends.

Source: Investing Answers

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