What economic metric is commonly used to measure a recession?

The commonly accepted economic metric used to measure a recession is GDP contraction. A recession is typically defined as a period of significant decline in economic activity across the economy, lasting more than a few months. This decline is generally reflected in various economic indicators, but GDP is the most comprehensive measure.

Gross Domestic Product (GDP) represents the total value of all goods and services produced within a country over a specific time period. When GDP contracts, it indicates that the economy is shrinking, which often leads to declines in various sectors, including employment, production, and investment.

This concept serves as a benchmark, where two consecutive quarters of negative GDP growth are often highlighted as a standard criterion for recognizing a recession. While other indicators like inflation and unemployment do provide insights into the health of the economy, GDP contraction specifically captures the overall economic performance and is essential for defining recessions.