08/21/2012 10:10 am ET Updated Oct 21, 2012

No End to Housing Bust in 'Carpet Capital of the World'

Not that long ago, the mills that once produced nearly half the world’s carpets could not find enough workers. The road along the Interstate was jammed with out-of-towners who drove hundreds of miles to find bargains amid the rolls of remnants and stacks of samples.

More than a million new homes a year were being sold by the mid-2000s, and they all needed fresh carpet.

By 2008, the housing boom was over. The town’s unemployment rate, once about 4 percent, nearly doubled in a blink, and is now more than 12 percent.

The people of Dalton thought that was the worst of it. All the lemons had been delivered. But as many communities around the country found, what seemed like the bottom wasn’t.

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