Depending on who you listen to we are either in a recession or a depression.  Neither sound good to me but I really didn’t know what the difference was until now

The text book definition of a recession is  a decline in the Gross Domestic Product (GDP) for two or more consecutive quarters.

The National Bureau of Economic Research defines  a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

A depression is a period of economic slowdown that lasts longer then a recession and has a larger decline of business productivity.

How can we tell the difference between a recession and a depression?

About.com uses this as a benchmark:

A good rule of thumb for determining the difference between a recession and a depression is to look at the changes in GNP. A depression is any economic downturn where real GDP declines by more than 10 percent. A recession is an economic downturn that is less severe.

Using this guide the last depression in the United States was from May 1937 to June 1938, where real GDP declined by 18.2 percent.

Our GDP for 2007 – 2008 was bad but not a depression

In 2007 the GDP was 2%

In 2008 the GDP was .9%

Our economy has definitely slowed down but we arent close the the numbers we have seen in the past