noun re·ces·sion \ ri-ˈse-shən \
Updated on: 15 Nov 2017

Definition of recession

1 : the act or action of receding : withdrawal
2 : a departing procession (as of clergy and choir at the end of a church service)
3 : a period of reduced economic activity


play \ri-ˈse-shə-ˌner-ē\ adjective

First Known Use of recession

circa 1652



noun re·ces·sion \ (ˌ)rē-ˈse-shən \

Definition of recession

: the act of ceding back to a former possessor

Origin and Etymology of recession

re- + cession

Financial Definition of RECESSION


What It Is

A recession is two consecutive quarters of declining gross domestic product (GDP)

How It Works

Let's assume that there has been a significant decline in industrial production, employment, and wholesale or retail trade. These things may cause GDP to decline for a three-month period (a quarter). If the situation continues in the next quarter, most economists will declare that the economy is in a recession.

The effects of a recession are far-reaching. Employment levels fall, discretionary income falls, and overall consumer spending falls, leading to tough times for most companies, which in turn lay off more workers and reduce overall consumer spending further. Few businesses expand and few consumers spend money, which lowers the demand for loans. Interest rates usually fall, as banks try to encourage consumers to take out loans.

The National Bureau of Economic Research has identified 32 recessions in the United States since the mid-1850s.

Why It Matters

Recessions are a normal part of the business cycle, but government fiscal and monetary policies often play key roles in making sure recessions do not go on for long. These policies involve increasing or decreasing government spending on entitlement programs and public works projects that create jobs, and they may involve changing bank reserve requirements, the interest rate at which the Federal Reserve lends money to banks, or the purchase or sale of Treasury securities.

RECESSION Defined for Kids


noun re·ces·sion \ ri-ˈse-shən \

Definition of recession for Students

: a period of reduced business activity

Medical Dictionary


noun re·ces·sion \ ri-ˈsesh-ən \

medical Definition of recession

: pathological withdrawal of tissue from its normal position
  • advanced gum recession

Seen and Heard

What made you want to look up recession? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!


of or relating to dancing

Get Word of the Day daily email!

Test Your Vocabulary

Star Wars Words Quiz

  • cu-jedi-training
  • The bounty portion of bounty hunters (such as Boba Fett) comes from a Latin word meaning
Name That Thing

Test your visual vocabulary with our 10-question challenge!

Word Winder's CrossWinder

Test Your Knowledge - and learn some interesting things along the way.


Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!