What is typically indicated by a trough in the business cycle?

A trough in the business cycle represents the lowest point in economic activity before an upward trend begins. At this stage, economic indicators such as GDP, employment rates, and consumer spending are typically at their lowest levels. Therefore, a trough is indicative of low economic activity, reflecting widespread struggles within the economy, including decreased business investments and consumer confidence. This period is crucial because it signals the end of a recession and the potential for recovery and expansion, leading to renewed economic growth. Understanding the significance of a trough helps in recognizing when to anticipate a turnaround in economic conditions.