business cycle


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

Yet many are already preparing for the peak of the business cycle, the end of easy money and the impending pinch as companies struggle with heavy debt loads as growth stalls. Cecile Gutscher,, "With Little Distress to Feast On, Here's How Vulture Funds Cope," 16 May 2018 Journal Report More in Investing in Funds & ETFs Many investors see health-care investments as a defensive play because demand for health products and services tends to remain stable throughout various phases of the business cycle. Tanzeel Akhtar, WSJ, "Midterm Elections Could Test Health-Care ETFs," 4 Nov. 2018 The White House may also be betting that business cycles in the two countries put the U.S. in a stronger bargaining position. Eamon Barrett, Fortune, "Tit-for-Tat: Trump and Xi Both Think the Other Guy is Bluffing," 16 June 2018 Of course, congressional behavior and the business cycle played a role in these outcomes. Eric Levitz, Daily Intelligencer, "Trump Has Not Transformed the Republican Party – Yet," 14 June 2018 There’s nothing says the business cycle has to be only focused on short term-ism. Recode Staff, Recode, "Full video and transcript: U.S. Senator Mark Warner at Code 2018," 30 May 2018 Also, using total compensation instead of wages might not be a good idea, because benefits might be increasing due to factors unrelated to the business cycle, such the rapid rise in health-care costs. Noah Smith,, "A job market this tight should deliver bigger raises," 11 June 2018 Economists understand even less about economic growth than about business cycles. The Economist, "Economists understand little about the causes of growth," 12 Apr. 2018 The consistently poor performance, especially relative to its regional neighbors, suggests that the causes are bad economic policies, not the business cycle or a downturn in a specific industry. The Editorial Board, WSJ, "The Regressive State of America," 25 Apr. 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

6 Dec 2018

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The first known use of business cycle was in 1858

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business cycle


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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