The five stages in a recession occur as follows: 4,3,2,1,3 or peak production, falling demand, falling production, job loss and then falling demand. At first production is at its peak (4) but as demand for product and services falls (3), production also falls (2). Production fall leads to the need for companies to lay off their employees or job loss (1). Lastly as things do not improve demand for products and services continues to fall (3).
