 TITLE: What Is the Difference Between a Recession and a Depression? CONTENT: Financial markets and the overall economy go through periods of ups and downs. But that doesn't mean a down week in the stock market qualifies as a recession—economic analysts focus on business cycles on the scale of months to years. When it comes to determining when the U.S. has entered or emerged from a recession, the National Bureau of Economic Research (NBER) is considered the official arbiter.\nRecessions are widespread and typically impact almost every sector of the economy. When deciding whether the economy has entered a recession, the NBER considers several indicators of economic activity, including industrial production, the employment rate, gross domestic product (GDP) growth and personal income. A recession begins when these indicators start a long, steady decline and ends when they finally rise again. This period of decline can last from months to years.\nA drop in employment, due to layoffs or reduced work hours, typically results in decreased household income and thus spending, which can further hurt the economy. This might cause companies that are losing business to start cutting back costs and laying off workers. Additionally, the government might make interventions such as going further into debt to attempt to stabilize the economy, and the Federal Reserve might cut interest rates to make borrowing cheaper.\nThe NBER recently declared that the U.S. entered an economic recession in February 2020, ending 11 years of economic expansion. They noted, however, that the current recession is due to the sudden public health crisis—not the typical financial factors that commonly lead to recessions. END