What economic signal typically occurs just before a recession?

The correct choice highlights a significant economic indicator that often precedes a recession. Decreasing industrial production is a clear signal that the economy may be slowing down. When industrial production declines, it suggests that companies are producing less, which can be an early warning sign of decreased demand for goods and services. This reduction in production often occurs when businesses anticipate lower consumer spending, which leads to cuts in manufacturing output, investment, and employment.

In the context of the economy, declining industrial production can adversely affect various sectors, leading to a ripple effect that contributes to an economic slowdown. This is critical information for economists and policymakers, as recognizing these patterns can help in making informed decisions to either avert or mitigate the effects of an impending recession.

The other choices, while relevant in specific contexts, do not represent typical precursors to a recession. For instance, increasing GDP generally indicates economic growth rather than a contraction. Decreasing inflation might suggest a stable economic environment rather than a downturn. High consumer confidence reflects optimism which is usually associated with an expanding economy rather than the early signs of recession. Thus, the choice of decreasing industrial production as a signal is integral to understanding economic cycles and their implications.