What is a common effect of an economic recession?

During an economic recession, one of the most notable effects is the increase in unemployment rates. This occurs because businesses experience a decline in demand for goods and services, leading them to cut costs. As a result, companies may lay off workers or halt hiring altogether. The reduction in overall employment significantly impacts both the economy and individual livelihoods, as more people are out of work and less money is circulating in the economy. Consequently, consumer spending typically decreases, further exacerbating the downturn. Overall, the rise in unemployment is a direct correlation of economic activity slowing down during recessions.