What is a recession and what effects will we see?

Question

My husband said that he saw on CNN that we are about to go into a recession because even though the stock market was way up last month, sales for October were way down.

What effect will this have on the average American and what kinds of changes and prices will we see and on what kinds of items?

Please give me as detailed an answer as possible. I am truly interested in this.

Thanks in advance!

Answer 1

A recession is a slow down in the economy. A recession is defined by two quarters of no growth in the gross domestic product (GDP).

There are many negative factors for Americans. Since companies are not selling as many products, they lay people off. Usually prices go up, since companies are still trying to gain the same profit on fewer sales. Homes become harder to sell. Wages either stagnate or go down.

The truth of the matter is that the government declares a recession over after the first increas of the GDP. The problem is that the jobs and income increases take much longer to come back.

Take care,
Troy