what is expansion 
expansion is the phase of the business cycle where real gross domestic product gdp grows for two or more consecutive quarters moving from a trough to a peak expansion is typically accompanied by a rise in employment consumer confidence and equity markets and is also referred to as an economic recovery understanding expansionthe rise and fall of economic growth is not a completely random unexplainable phenomenon like the weather the economy is believed to follow a cyclical path that continues to repeat itself over time this process is called the business cycle and is broken down into four distinct identifiable phases economists policymakers and investors closely study business cycles learning about economic expansion and contraction patterns of the past can assist in forecasting potential future trends and identifying investment opportunities expansions last on average about four to five years but have been known to go on anywhere from 10 months to more than 10 years 1 the national bureau of economic research nber determines the dates for business cycles in the united states the longest u s expansion on record lasted 128 months or just over 10 and a half years according to the nber ending in february 2020 1special considerationsleading indicators such as average weekly hours worked by manufacturing employees unemployment claims new orders for consumer goods and building permits all give clues as to whether an expansion or contraction is occurring in the near future however economists and analysts generally agree that there are two main forces that best determine corporate profits and the state of the general economy capital expenditure capex the money companies spend on maintaining improving and buying new assets and interest rates 