Expansionary & Recessionary Periods

by Doug Drabik of Raymond James, 11/14/25

An economic expansion is defined as a period during which the economy is growing, characterized by increased activity and robust employment. The Gross Domestic Product (GDP) is rising. Conversely, a recessionary period occurs when there is a decrease in aggregate demand, resulting in an economic decline. GDP and employment are often falling.

The last 13 recessionary and expansionary periods are detailed in the chart. The average length of a recessionary period during these 80 years was 0.9 years, with the longest one, the Great Recession, spanning from December 2007 to June 2009 (1.6 years). Expansionary periods have lasted longer, averaging 5.3 years over the same time.

Recent history paints a different story. The last four recessions averaged 0.9 years, identical to the 80-year average. However, the last four expansionary periods average 8.5 years, extending more than twice as long as the average of the previous nine expansionary periods. Several questions come to light. Has the government and the Fed figured out how to suppress recessions? Soft landings, as they are referred to, occur when the Central Bank (the Fed) prevents the economy from overheating while avoiding both uncontrolled inflation and a recession. If so, is this constructive, or does it amplify any adverse consequences of the next recession as economic cycles eventually move full circle?

Recesssion and expansion table

There appears to be some cracks in employment strength. Nonfarm Payrolls, which measure the number of jobs added or lost in the economy, have shown diminishing strength, falling well below averages in each of the last four monthly reports. Still, the overall unemployment rate stands at 4.3%, well inside what is often referred to as full employment or the level of jobs expected in a healthy economy. The net level of employment remains favorable, yet the negative directional trend gives the Fed and investors pause for concern. Further hesitation might be inferred from the recent inflation statistics, as measured by the Consumer Price Index (CPI). Although the data release was below expectations, it was the highest print this year and the fourth increase in the last five months, indicating that inflation is far from quelled.