GOIH Economic Analysis: Unemployment Numbers are troubling?

GOIH Economic Analysis: Unemployment Numbers are troubling?

We are analyzing the current reported unemployment numbers and we have several questions regarding the publicly announced numbers that unemployment has not increased in the past two quarters.

Our analysis indicates that the unemployment numbers should have substantially increased due to the decrease in housing starts and the trickle down effect of the home building industry.

The home building industry is a mini economy in itself. A new home creates demand from the following industries:

Consumer electronics---TVs, DVDs, cds, plasma TVs, etc.
Durable goods---frigs, stoves, micro waves, etc.
Linens, towels, furniture
building supplies
landscaping
construction labor
real estate commissions
interest payments
permit fees

Wal-mart reported lower profits on increased sales, i.e., they lowered the price to move the goods.

Home Depot (HD) reported lower sales in their product lines, home improvement projects are not selling.

We see Wal-mart if sales continue to drop, starting layoffs.

We see a decrease in consumer consumption due to the lack of increase in home equity and the inability to refinance into a higher line of credit to support continued consumer purchases.

Home starts have decreased 500,000 per year from the peak of 2005. With an average home price of $250,000 the effect on GDP is tremendous and multiplying by the trickle down effect a factor of 4x from the effect on additional industries affected, demand has definitely decreased causing a decrease in demand from the consumer, causing consumer retail to decrease as evidenced by the numbers reported by Wal-mart and Home Depot.