MP Rana

Recession in an economy, in general terms is described as a situation when an economy features slow economic activities, faces decline or no income situations. During this period the economy also suffers a steep fall in GDP growth rate, which tends to worsen situation further. The American economy is considered as the ‘mother’ economy of all other nations. Any fall in the parent economy affects the income and growth of the dependent economies. The global economy is facing a downturn since last few months that has given birth to a number of consequences that can be tagged as the ‘Indicators of Recession’ in a particular economy.
The outcome of recession is unquestionably disastrous for the economy and comprises of the following four major indicators.

Reduction in the consumer expenditure
The first and the foremost effect of Recession is that, it influences the spending habits of customers and prompts them to save more for the approaching period of depression. This in turn affects the business and production activities of the market and drags the income generating sector in trouble.

Mounting Unemployment
The consequences generated by the first indicator, opened ways for the second to penetrate and grow during the recession period. The economy lands into a situation where the existing jobs will face a steep decline leave alone the generation of fresh job opportunities.

Fall in investment and interest rates
The chain is carried on and third indicator signals of a fall in the interest rate in future that leads to the drawing back of money invested by many investors who could might feel insecure for their investments and can fear of the approaching market situation. Inflation
Inflation is always the most predictable and inevitable consequence of all the recession forces in an economy. It brings along high prices, less purchasing power, slow income growth and unemployment in a bunch.

All these indicators are clear signs of the impending financial crisis that every economy has to face.