In economic terms, expansion is an increase in the level of economic activity. It is a period of economic growth as measured by a rise in real GDP (Gross Domestic Product).
Why It's Important
An expansion means that the economy is doing good. This typically coincides with the stock market. Think about it. If the economy is doing good, that means companies are generally doing good which means they are profitable. It directly effects the stock market. This is only one phase of the economic cycle.
Are we currently in an expansion? You can tell by figuring out if: