Relationship between Unemployment and Stock Prices of Retail Companies: A Correlational Study

Relationship between Unemployment and Stock Prices of Retail Companies: A Correlational Study

Author: 
John R. Osiemo
Program of study: 
D.B.A.
Abstract: 
Stock price volatility during the release of monthly unemployment information leads to lose of money. Understanding the relationship between unemployment and stock price could enable investors, money managers, and retail leaders to reduce loss of investments as a result of fluctuations of unemployment information. The primary purpose of this study was to determine the relationship between unemployment and stock prices of retail companies in Texas. The secondary purpose of the study was to determine if the types of goods and services sold moderated the relationship between unemployment and stock prices of retail companies. Pearson Correlation and factorial Analysis of Variance (ANOVA) were used to test the study’s hypotheses. The results from the correlation test revealed an existence of a strong negative correlation between unemployment and stock prices of retail companies in Texas (r = -.981, p = 0.01). The results from the factorial ANOVA results showed that the types of goods and services sold moderated the relationship between unemployment and stock prices of retail companies [r2 = .891, F (2,174) = 412.9, p = 0.01]. The findings of the study revealed that when unemployment rises, the stock prices of retail companies fall and vice versa. Besides, the findings revealed that the types of goods and services sold determined the magnitude of the movement of the stock prices. A further investigation on the causal effects or impact of unemployment on stock prices of retail companies is recommended.
Dedication: 
I dedicate this study to my entire family for their great love and support throughout the process. I will like to thank my father, Pius and mother, Agnes who instilled on me the courage to love education. I will thank my wife Elmelda for the tremendous support and encouragement she had provided me. To her I say; I love you and I am proud of you. To my children Daniel, Agnes, and Zachary; this provides you with the challenge ahead: Education is not an option but a necessity. To my great brothers: Julius, Paul, Simeon, Joseph, and Thomas – thanks all for the encouragement and prayers all along this tedious journey. An achievement is a combination of devotion, motivation, and vision. However, fate and divine intervention could hinder or enhance ones’ achievements. I will thank such interventions and powers that guided me throughout this process: Glory be to GOD.
Acknowledgements: 
My acknowledgements are to my chair, Dr. Brian Sloboda for guiding me in this journey. Besides, I will thank Dr. Brian for stepping in to be my chair after unsuccessfully seeking a chair for some time when Dr. Aysar resigned from the University. I will thank Dr. Aysar for his guidance through my initial dissertation processes including the proposal and the internal review board processes. Dr. Brian’s acceptance gave me the boost in embarking on this long journey and enabled me to successfully finish the doctoral journey. I will like to recognize my committee members, Dr. Kevin Banning and Dr. Xianbin Li. I will thank Dr. Kevin for his prompt responses wherever I contacted him about my dissertation. Dr. Kevin gave me tremendous advices on problem alignment and on the findings of the study. I will also thank my committee member, Dr. Xianbin Li for his thoughtful suggestions. Dr. Li helped me to understand how to approach my measurement tools and statistical analysis. I am grateful for all my committee members for the support they provided throughout this journey. To all my committee members, I am very grateful for having you as my dissertation team