To spot economic recessions, we can look at some important signs called macroeconomic indicators. These include Gross Domestic Product (GDP), the unemployment rate, and inflation.

1. Gross Domestic Product (GDP):

   • A recession usually happens when the economy shrinks for two straight quarters. This means that the GDP goes down. For example, during the COVID-19 pandemic in 2020, the U.S. GDP dropped by about 33.4% in the second quarter compared to the first quarter.
   • Also, if the GDP growth rate stays below 2-3% for a long time, it can show that the economy is weak.

2. Unemployment Rate:

   • When more people are out of work, it usually means we are heading into a recession. In fact, during the financial crisis in 2008, unemployment in the U.S. jumped from 4.7% in November 2007 to 10.0% in October 2009.
   • If many people start to file for unemployment benefits, over 300,000 claims in a week, it can be a sign that a recession is coming.

3. Inflation:

   • Inflation is when prices go up, and watching inflation rates can help us understand the economy. When inflation is high (like over 2-3%) but the economy isn't growing (this is called stagflation), it can lead to a recession.
   • For example, in December 2021, inflation in the U.S. reached 7.0%, which raised worries about economic stability.

To sum it up, by keeping an eye on these important indicators, we can catch signs of a recession early. This helps government leaders and economists make decisions to protect the economy.