One of the many ways that scholars and economists try and predict the state of the economy is through what is known as an economic indicator. Recently it has been discovered that popular search engines such as Google have been able to predict economic trends in times of a nearing recession. But if America’s searches on Google are close to any sign of the state of the economy, then a recession is not as near as we may believe.

The future trends of the economy can be measured through a type of economic indicator known as a leading indicator. A research company by the name of DataTrek followed American Google searches for words such as “coupon” and “unemployment” leading up to the Great Recession. Google searches for the word “coupon” began to increase by more than 5% starting in 2005. Then there began to see a spike in the search from the term in which it rose to 45% in 2008 which was the start of the Recession. The peak of “coupon” being searched was 2011 when searches were 200% above where they were in 2005.

Searches for the term “coupon” is a result of consumers looking to spend less on items or to not even spent at all. DataTrek has found that as of June 2019 searches for this word were 7% lower since the previous summer. Other phrases tend to have an insight into the concern and curiosity of the American consumer.

According to the Washington Post, August of 2019 marked the first time that the numbers for people searching “Recession” + {current year} exceeded the numbers that were seen during the Great Recession. The likely cause for this immediate spike in searches could be linked to the Dow Jones falling more than 800 points in August and with an inverted yield curve showing troubling signs.

While this can be rather helpful in trying to find new ways to predict the direction of the American economy, there are many flaws with using this as a measure to accurately depict what is going on because each time someone is searching any of these words.

One may simply be inclined to study what a recession is for a class, looking for a coupon before making the weekly trip to the supermarket or even finding themselves being autocorrected while misspelling the tv show “Succession” There are numerous possibilities as to why one would be inclined to search for “coupon” or “Recession” and not all are directly related to the actions of the economy.

In the same study from DataTrek, keywords related to television and entertainment were linked to signs of unemployment given that people had more free time and also limited money on spending for entertainment outside of their home.Economists across the country including JPMorgan Chase’s chief economist Bruce Kasman told Bloomberg, that he believes that chances are low for a nearing Recession. Within some time it will unravel if there is a Recession nearing and if the Google data can indicate the foreseeable future of the United States economy.

Additional Sources:https://www.bloomberg.com/news/articles/2019-01-24/google-searches-signal-u-s-consumption-intact-economist-says