Business cycles have four main phases: expansion, peak, contraction, and trough. Each of these phases has a big effect on how many people have jobs.
Expansion: This is when businesses start to grow. People want more goods and services, so companies need to hire more workers. You might see a lot of job openings in stores and building projects when the economy is booming.
Peak: This is the highest point of the economy. Even though there are still many jobs, the number of new jobs slows down. Workers might get better pay, but there aren’t as many new positions available.
Contraction: During this phase, the economy starts to shrink. Businesses produce less and might have to let go of employees. This causes unemployment to rise. For example, lots of people lost their jobs during the 2008 financial crisis.
Trough: This phase is the lowest point for employment. Many people are out of work. Slowly, things start to get better, and businesses begin to hire again. However, this recovery can take time, and the job market stays a bit unstable for a while.
Business cycles have four main phases: expansion, peak, contraction, and trough. Each of these phases has a big effect on how many people have jobs.
Expansion: This is when businesses start to grow. People want more goods and services, so companies need to hire more workers. You might see a lot of job openings in stores and building projects when the economy is booming.
Peak: This is the highest point of the economy. Even though there are still many jobs, the number of new jobs slows down. Workers might get better pay, but there aren’t as many new positions available.
Contraction: During this phase, the economy starts to shrink. Businesses produce less and might have to let go of employees. This causes unemployment to rise. For example, lots of people lost their jobs during the 2008 financial crisis.
Trough: This phase is the lowest point for employment. Many people are out of work. Slowly, things start to get better, and businesses begin to hire again. However, this recovery can take time, and the job market stays a bit unstable for a while.