There's no single official threshold that flips a recession into a depression — it's more a matter of severity and duration than a hard legal line. A recession is commonly defined as two consecutive quarters of declining economic output. A depression isn't formally defined the same way, but is generally used informally for a recession that's unusually deep, prolonged (often years rather than months), and accompanied by very high unemployment and widespread business failures — the Great Depression of the 1930s remains the reference point everyone compares severity against.