High inflation and weak growth together

Why do stocks sometimes rise while a recession is still going on?

Markets look ahead to the recovery

Recessions | TradeLiga

Jobs get scarcer, shops quieter, pay rises smaller. A recession is a period when the economy shrinks instead of growing.
A common rule of thumb is two quarters in a row of falling GDP. Official judges, like the NBER in the US, also look at jobs, income and spending.
Businesses sell less, cut investment and hire fewer people, so unemployment rises. After the 2008 crisis, US unemployment reached 10%; in Spain it later passed 26%.
The usual response: central banks cut interest rates to make borrowing cheaper, and governments spend more or cut taxes to support demand.
The worst mix is stagflation: a weak economy and high inflation, as after the 1970s oil shocks. Cutting rates would feed inflation, so policy makers get stuck.
Common mistake
Mistake: “stocks fall until the recession ends.” Markets look ahead. In 2009 the S&P 500 bottomed in March, three months before the US recession officially ended in June.
Key takeaway
Recessions are a normal part of the cycle. Your best personal shield: an emergency fund and skills employers need.

A common definition of recession is... Two quarters of falling GDPIt's a rule of thumb; official bodies also check jobs, income and spending.
In a recession, central banks usually... Cut interest ratesCheaper borrowing encourages spending and investment.
Stagflation means... High inflation and weak growth togetherStagnation plus inflation: the hardest mix for policy makers.
Why do stocks sometimes rise while a recession is still going on? Markets look ahead to the recoveryPrices reflect expectations, so they often turn before the news improves.