What is a common characteristic of a recession?

A common characteristic of a recession is decreased consumer confidence. During a recession, individuals and businesses often feel uncertain about the economic outlook, leading to a significant reduction in spending and investment. This lack of confidence can stem from various factors, such as rising unemployment, falling incomes, and negative news about the economy, all of which can cause consumers to hold back on making purchases.

As consumer confidence dips, this can lead to a cycle of reduced economic activity, as diminished spending can further contribute to a slowdown in business operations and investments. In contrast, options like steady job creation and rising business investments are typically not associated with a recession, as these conditions would suggest a robust and healthy economy. Fluctuating GDP may occur during different economic cycles but does not specifically define the characteristic nature of a recession, where GDP is more likely to contract over consecutive quarters.