Peak

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DEFINITION of 'Peak'

The highest point between the end of an economic expansion and the start of a contraction in a business cycle. The peak of the cycle refers to the last month before several key economic indicators, such as employment and new housing starts, begin to fall. It is at this point that real GDP spending in an economy is its highest level.

BREAKING DOWN 'Peak'

Business cycles are dated according to when the direction of economic activity changes and is measured by the time it takes for an economy to go from one peak to another. Also, because economic indicators change at different times, it is the National Bureau of Economic Research that ultimately determines the official dates of peaks and troughs in U.S. business cycles.

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