An economic downturn refers to a period when the economy experiences a decline in its overall performance. This decline is often marked by a decrease in GDP (Gross Domestic Product), rising unemployment rates, reduced consumer spending, and lower industrial production. During an economic downturn, businesses may struggle with reduced demand for their products or services, leading to cost-cutting measures, layoffs, and decreased investments. Governments may respond with fiscal or monetary policies aimed at stimulating the economy and averting a more severe recession.
Example of Use:
“Due to the recent economic downturn, many companies have been forced to reevaluate their hiring strategies, focusing on retaining top talent while freezing new hires.”
Related Terms:
Cost of Living Adjustment (COLA)
