During which phase does the economy typically start to thrive again after a downturn?

The phase during which the economy typically starts to thrive again after a downturn is the recovery phase. This is characterized by an increase in economic activity following the lowest point of the economic cycle known as a trough. During recovery, key indicators such as employment rates, consumer confidence, and GDP start to improve as businesses begin to invest and consumers start spending again.

This phase is vital because it sets the stage for subsequent expansion, where the economy continues to grow at a more robust pace, moving toward its peak. Understanding recovery is essential as it marks the transition from a period of recession and an indication that the economy is regaining momentum.