Predictions from Google search data
Google has started reporting some interesting findings about predictions based on web search data. I would guess that these things have been in the works for several years before Google went public with them.
Last year, they introduced Google Flu Trends, which basically monitors influenza-related searches and tries to predict outbreaks early by identifying geographical location that are suddenly showing a strong increase in such searches. An article describing the system was even published in the very high-profile scientific journal Nature. (Later, people started to use Twitter for flu monitoring.)
Lately, the official Google research blog has started to write about the possibilities of using Google search data to predict economic variables in the short term. A recent analysis they did, based on claims for unemployment benefits in the U.S., seems to suggest that the U.S. economy is recovering.
From the blog post:
One of the strongest leading indicators of economic activity is the number of people who file for unemployment benefits. Macroeconomists Robert Gordon and James Hamilton have recently examined the historical evidence. According to Hamilton’s summary: “…in each of the last six recessions, the recovery began within 8 weeks of the peak in new unemployment claims.”
Let’s see if the prediction comes true!
The analysis is described in more detail in this paper.