A recession is an extended period of economic decline. It is a business cycle contraction that occurs when there is a general decline in economic activity. In the United States, a recession is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales".
During a recession, there is a decrease in the demand for goods and services which leads to a decrease in production and employment. This can lead to lower wages and higher unemployment rates.
For example, during the Great Recession of 2008-2009, many people lost their jobs and homes due to the housing market crash. The unemployment rate increased from 4.7% in November 2007 to 10% in October 2009.
