# Recession vs. Depression: Why One Hits Different

You've probably heard the term "recession" thrown around a lot, but do you actually know how it differs from a depression? Here's the thing: the U.S. has only experienced **one depression** in its entire history—the Great Depression (1929-1939). Since then? 14 recessions. That tells you something.

**How does the NBER officially call a recession?**
It's not just "two quarters of negative GDP growth" like the textbooks say. The National Bureau of Economic Research looks at the full picture: unemployment trends, industrial output, retail sales, and personal income. They're deliberately vague because the economy isn't a simple math equation.

**The Sahm Rule matters here**: When the 3-month average unemployment rate jumps 0.5% or higher compared to the previous 12-month low, recession confirmed. Simple as that.

**Now, the numbers gap between 1930s and 2008** tells the real story:
- **Great Depression**: 29% GDP loss | 20% peak unemployment | 47% industrial production drop
- **2008 Recession**: 4.3% GDP loss | 10% unemployment | 10% production drop

See the difference? Depression = economic apocalypse. Recession = painful but manageable.

**Why haven't we had another depression?**
FDIC deposit insurance (up to $250k coverage now), unemployment insurance, and a beefed-up Federal Reserve system. Lessons learned the hard way.

Bottom line: A recession is like a bad flu. A depression? That's a plague.