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What happens when unemployment is above 8%?
It has happened 5 times since 1948. A year after it began, the S&P 500 was up 4 of 5 times, with a median move of +26.5%. On an ordinary day in the same years the median was +10.6%, up 75% of the time.
Unemployment rate above 8. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +7.2% 80% up · n 5 · normal +1.1% | +26.5% 80% up · n 5 · normal +10.6% | +29.0% 100% up · n 5 · normal +28.9% |
| Gold | -2.2% 20% up · n 5 · normal 0.0% | +7.3% 60% up · n 5 · normal +2.9% | +18.7% 60% up · n 5 · normal +10.4% |
| Oil | +3.2% 80% up · n 5 · normal 0.0% | +6.7% 80% up · n 5 · normal 0.0% | +134.9% 80% up · n 5 · normal +8.9% |
| 10-year yield (pts) | +0.14 pts 80% up · n 5 · normal +0.01 pts | +0.73 pts 80% up · n 5 · normal +0.09 pts | +0.61 pts 60% up · n 5 · normal +0.06 pts |
| Inflation, CPI y/y (pts) | -0.55 pts 20% up · n 5 · normal -0.00 pts | +0.93 pts 60% up · n 5 · normal -0.01 pts | +2.90 pts 60% up · n 5 · normal -0.01 pts |
| Unemployment rate (pts) | 0.00 pts 33% up · n 3 · normal 0.00 pts | -0.40 pts 40% up · n 5 · normal -0.20 pts | -1.90 pts 20% up · n 5 · normal -0.40 pts |
Median move after each episode began, how often it rose, and how many episodes had data. "Normal" is the same move from any trading day in the same years.
Every time it happened
- 2020-05-08 · true for 102 trading days · S&P 500 a year later: +44.5%
- 2009-03-06 · true for 905 trading days · S&P 500 a year later: +66.6%
- 1981-12-04 · true for 548 trading days · S&P 500 a year later: +9.8%
- 1976-12-03 · true for 27 trading days · S&P 500 a year later: -7.9%
- 1975-02-07 · true for 252 trading days · S&P 500 a year later: +26.5%
- 5 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- Few episodes: read the ranges and the interval, not just the median.
- Try enough situations and one will look like an edge by chance.
- Macro numbers are as published at the time. Stocks include companies that later died.
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- What happens when unemployment is above 10%?
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- What happens after unemployment rises 1 point in a year?
- What happens after unemployment rises half a point in six months?
- What happens when the US has fewer jobs than a year ago?
- What happens after jobless claims rise 30% in three months?
- What happens when weekly jobless claims are above 400,000?