The weird Google searches of the unemployed and what they say about the economy

If you really want to know how the economy is doing now, just Google it. At least that’s the goal of a growing number of researchers who are turning to big data in hopes of unlocking the secrets of the economy at the speed of the Internet.

The movement -- dubbed “nowcasting” -- is piquing the interest of policymakers in Washington and around the world frustrated by the long lag in official government statistics as they make decisions where timing is everything. Want to figure out where prices are headed in 86 countries on a given day? A project at the Massachusetts Institute of Technology tracks them at thousands of retailers. How many people will file for unemployment benefits in one week?

Economists at the University of Michigan are tapping Twitter to estimate the number of new applicants. Are more young men finding jobs? Google suggests the incidence of searches for adult entertainment can provide a clue.

“Statistics serve us really well and are completely essential as benchmarks for where the economy is -- or more precisely, has been,” said Matthew Shapiro, an economist at the University of Michigan working on the Twitter project. “But we don’t have a lot of indicators that tell us what’s happening right now, particularly when the economy is changing direction.”

The government’s meticulous method of collecting data still relies heavily on phone conversations with families and businesses. Though its numbers are considered the gold standard, the aftermath of the Great Recession has shown the data can come too late for policymakers at crucial moments in the recovery. In the midst of the recession, Google’s chief economist Hal Varian released a paper showing how to use the company’s search data to measure auto sales and consumer spending, among other things. Now, researchers both inside and outside of government are using it to estimate everything from unemployment to mortgage delinquencies.