What is a growth recession?

By Investopedia Staff AAA
A:

A growth recession is an instance in which an economy grows at such a slow pace that it creates net unemployment, meaning more jobs are actually lost in the economy than are being added. The term itself was coined by economists and is widely used by business economists to describe such economic instances.

In a growth recession, the lack of economic growth (or slowed economic growth) leads to decreased job creation. Therefore, even though the economy is not technically contracting like in a recession, the net loss of employment creates the similar economic conditions.

Using the guidelines set out by economists to describe a growth recession, many economists now believe that the United States saw growth recessions in 1986, 1995 and between 2002-2003. Although real GDP saw no significant drops during those periods, unemployment rose none-the-less. (To learn more, check out A Review Of Past Recessions.)

This question was answered by Lovey Grewal

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