Recession refers to a period of time during which the economy experiences a sharp decline in economic activity. This decrease in economic activity can last a few months or even a year or more, depending on the severity of the downturn and government policy responses.

Many economists believe that recessions are caused by a variety of factors, including financial market problems, slowing exports or investment, and structural changes in an industry, such as the shift from manufacturing to service industries. Some of these factors may not be apparent until they start to cause a downturn in the economy. For example, a sudden drop in the stock market can lead to a decrease in confidence and investor spending which can eventually lead to lower sales, less employment, and a recession.

A recession can also be self-perpetuating. As companies try to reduce costs, they may lay off workers and cut wages which can further decrease consumer spending. This cycle can continue as a reduction in consumer spending leads to a decrease in company profits and an increase in unemployment.

Regardless of the causes, all recessions are difficult for families. The uncertainty and hardship associated with a recession can affect family life in a number of ways, including the timing of marriage, childbearing, and household formation. In addition, financial difficulties can limit people’s ability to save for unexpected expenses and can cause them to delay buying things that they need or want.