I will leave it to economists to debate what is a true economic indicator but recently, Google has started claiming that its search patterns are saying that economy is recovering. Basically, Google's chief economist says that he can tell the direction of economy from American's search habits.
For e.g Google is seeing following trends:
- Decrease in searches for unemployment benefits
- Increase in searches for homes and real estate agents
- They also showed an early spike in government "cash for clunkers" program.
You can always disagree with Google's claim and argue that a search for "property prices in a neighbourhood of Las Vegas" shouldn't be interpreted as recovery sign. Maybe, the person is trying to to sell the house! In the end, it is very difficult to interpet the true motive from few key words in the search. After all, economic forecast is a serious business and econometric modeling it is a very complex thing!
I think that we will continue to see this trend in future where "search on the web" will continue to indicate at least partially where the economy is heading. As search on the web moves from "keyword search" to more advanced "semantic search", we will have better idea about the intention of the query.
If we can analyze the "query intent" then we can build better models also. We also have to take into consideration the search patterns from Yahoo, Bing and other search engines to have a complete picture. I will still not dismiss off leading indicators from GE as it remains a great company despite a plunge in its stock value.