Do you know the difference between a depression and a recession? If not, you may be scared that the United States is in for a depression soon enough. Simply put, it is important to know the ins and outs of the depression vs recession debate. The fact of the matter is that there are many big differences, and you need to know what they are if you are interested in your money as well as the economy as a whole.

First off, let’s take a close look at the definition of a depression. This is a sustained downturn in one or several of the national economies. Simply put, a depression is more severe than a recession. It is important to know that there is no exact definition of a depression, and that the United States has not seen one since the 1930’s.

On the other side of the debate, a recession is a phase of the business cycle in which the gross domestic product is negative for at least two quarters. A recession is usually first visible in employment numbers, income, retail sales, and industrial production.

The depression vs recession topic is sure to be a hot one as long as the economy continues to struggle. To remember the difference keep in mind that a depression is a form of recession in which there are unusual negative changes to the country’s job markets, income, credit, and investments.

The more you know about depression and recessions the better off you will be. It is important to know the details of the depression vs recession debate; this will help you as a consumer.