A stress vulnerability model was applied to the relationship between economic stress and mental health. Longitudinal data were obtained by reinterviewing 291 respondents from a prior community survey of economic change and health (Catalano & Dooley, 1983). The follow-up survey was conducted at the height of the last recession, approximately 1 year after the first. As predicted, increases in self-reported economic stress adversely affected psychological health, controlling for prior mental health status. However, individuals with poor prior mental health status were more vulnerable to economic stress: They were more likely to experience it during this economic contraction and were somewhat less likely to recover from it. Economic stress and mental health appear to have reciprocal effects, suggesting a spiral model of adaptation. Implications for interventions concerning economic change and mental health are discussed.