| 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. |
