economic cyclenoun phrase
ee-kuh-NOM-ik SY-kul
The recurring pattern of expansion, peak, contraction, and recovery in economic activity — every economy moves through this cycle repeatedly.
"Understanding the economic cycle helps investors know when to be cautious and when to take risk."
boomnoun
boom
A period of strong economic growth, low unemployment, rising wages, and high business confidence.
"The 1990s tech boom created enormous wealth and transformed global business."
bustnoun
bust
A period of sharp economic decline following a boom — businesses fail, unemployment rises, asset prices fall.
"The dot-com bust of 2001 wiped out trillions in stock market value within months."
recessionnoun
reh-SESH-un
A significant decline in economic activity, formally defined as two consecutive quarters of negative GDP growth.
"The 2020 recession was the sharpest on record — but also one of the briefest."
recoverynoun
reh-KUV-er-ee
The phase of the economic cycle following a recession, characterized by returning growth, falling unemployment, and rising confidence.
"Recovery was uneven — professionals recovered quickly while low-wage sectors lagged years behind."
leading indicatornoun phrase
LEE-ding IN-dih-kay-ter
A measurable factor that changes before the economy begins to follow a pattern — it predicts where the economy is heading.
"Consumer confidence and building permits are leading indicators — they signal economic direction before it's officially confirmed."
lagging indicatornoun phrase
LAG-ing IN-dih-kay-ter
A measurable factor that changes after the economy has already shifted — it confirms a trend rather than predicting it.
"Unemployment is a lagging indicator — it keeps rising even after a recession has technically ended."
unemployment ratenoun phrase
un-em-PLOY-ment rayt
The percentage of the labor force that is jobless and actively seeking work — a key measure of economic health.
"When the unemployment rate falls below 4%, economists typically consider the labor market tight."
GDP growthnoun phrase
jee-dee-pee grohth
The rate of increase in a country's Gross Domestic Product — the total value of all goods and services produced. The primary measure of economic performance.
"GDP growth of 3% or more is generally considered healthy for a developed economy."
consumer confidencenoun phrase
kun-SYOO-mer KON-fih-dens
A measure of how optimistic households are about their financial situation and the broader economy — high confidence leads to more spending.
"Consumer confidence fell sharply after the central bank's aggressive rate rises."
market sentimentnoun phrase
MAR-ket SEN-tih-ment
The overall attitude or mood of investors toward a market or asset — sentiment can drive prices independently of fundamentals.
"Market sentiment turned negative as inflation data came in higher than expected."
trendnoun
trend
A general direction in which a market, economy, or indicator is consistently moving over time.
"The trend in remote working has permanently altered demand for commercial real estate."
forecastnoun / verb
FOR-kast
A prediction of future economic or market conditions based on current data and analysis.
"The IMF revised its global growth forecast downward to 2.8% for the year."
disruptionnoun
dis-RUP-shun
A significant change that fundamentally alters the structure of an industry or economy — often driven by technology or geopolitics.
"Artificial intelligence represents the most significant economic disruption since the internet."
sector rotationnoun phrase
SEK-ter roh-TAY-shun
The movement of investment capital from one industry sector to another as economic conditions change — a strategic response to the economic cycle.
"Sector rotation out of technology and into energy is a common investor response to rising inflation."
opportunity costnoun phrase
op-er-TYOO-nih-tee kost
The value of the next best alternative you give up when making a decision — what you sacrifice by choosing one option over another.
"The opportunity cost of leaving money in a savings account during a bull market can be enormous."
contractionnoun
kun-TRAK-shun
A phase of the economic cycle where output is shrinking — businesses invest less, employment falls, and consumer spending slows.
"GDP contraction for two consecutive quarters signals a technical recession."
expansionnoun
ek-SPAN-shun
A phase of the economic cycle where output is growing — employment rises, incomes increase, and businesses invest and hire.
"The US experienced its longest economic expansion on record between 2009 and 2020."
peaknoun
peek
The highest point of the economic cycle — maximum output, lowest unemployment — just before a downturn begins.
"Asset prices typically perform best just before a cycle peak — and fall sharply after."
troughnoun
trof
The lowest point of the economic cycle — maximum unemployment and minimum output — just before recovery begins.
"Buying assets at the trough of a cycle is the most profitable strategy — and the hardest to execute."
yield curvenoun phrase
yeeld kurv
A graph showing interest rates on government bonds across different maturities. An inverted yield curve — where short-term rates exceed long-term rates — has predicted every US recession for 50 years.
"The inverted yield curve in 2022 warned economists that a recession was likely within 12–18 months."
credit cyclenoun phrase
KRED-it SY-kul
The cyclical expansion and contraction of credit availability in the economy — easy credit fuels booms; tight credit deepens recessions.
"The credit cycle amplifies economic cycles — when banks stop lending, recessions deepen rapidly."
GDP per capitanoun phrase
jee-dee-pee per KAP-ih-tuh
A country's total economic output divided by its population — a measure of average living standards, more useful than total GDP for comparisons.
"Norway has one of the highest GDP per capita figures in the world, driven partly by its sovereign wealth fund."
technical recessionnoun phrase
TEK-nih-kul reh-SESH-un
The formal definition of a recession — two consecutive quarters of negative GDP growth — which may not always reflect the full economic picture.
"The UK entered a technical recession in late 2023, though unemployment remained historically low."
bear marketnoun phrase
bair MAR-ket
A sustained period of falling asset prices, typically defined as a decline of 20% or more from recent highs — often coincides with or precedes a recession.
"Bear markets typically last 9–18 months — significantly shorter than bull markets historically."