In the year following the 5 recent dives by stocks, California’s unemployment rose on average from 6.1% to 7.6%.
June 22, 2022 at 9:21 a.m.The stock market is officially in a bear market downturn, and that’s rarely good news for California’s economy.Using the definition of a bear market as a 20% drop in the S&P 500 stock index, my trusty spreadsheet looked at what followed the start of the five such Wall Street downturns before the pandemic.
Geopolitical turmoil, notably an Arab oil embargo, a change in presidents , and inflation-bashing double-digit interest rates sent stocks into a dive. Wall Street’s pain certainly foreshadowed brewing economic distress in California. Curiously, the California economy was largely spared any fallout in the year after this bear market started.
This brief and modest bear market was definitely felt in California in the year following and beyond. Unemployment jumped to 7.9% from 5.9% and 2.5% job growth became a dip of 1.3% a year. Income growth chilled, too, to 2.5% from 7.8%.
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