Google trending the economy

Recently I posted a blog about how Google Trends “predicted” the recession. While I was there, I decided to see the search trend on the term “economy“. I wondered how it would compare. Here is Google’s trend chart:

aaronhoos_googletrends_economy

This chart fascinates me for a couple of reasons:

  • The current economic climate is not prompting people to search for the word “economy” any more than any other economic climate. I’d have guessed that it would be higher.
  • Not surprisingly, there is a valley through the third quarters when everyone is away on vacation and not thinking about work or business or the economy.
  • There are slight peaks at the end of every quarter, which makes sense that people are thinking about economic factors that might influence their EOQ results or forecasts.
  • What surprised me the most was the large dip at the end of the year. It’s as if people are so focused on Christmas and New Year and the opportunities for the year to come that they stop searching for “economy” information? While there is often a small spike at the end of every quarter, there is a huge dip at the end of the year; and in every case, that end-of-the-year dip is greater than the summer dip.

Google Trends: (mis)fortune teller

I was in Google Trends the other day, doing some research for a client. On a whim, I decided to also see the search trend for “recession”. What an interesting find! Here is Google’s Trend graph:

aaronhoos_googletrends_recession

At first glance, it’s shocking to see how much the search volume and news references have grown. It’s shocking, but not a huge surprise: the recession is bad but the badness is stoked like a fire by the media.

But there’s something I find even more fascinating: Look at the first quarter of 2007. Recession searching spiked there. By today’s standards it wasn’t much, but compared to the amount that it was searched prior to that, it was huge. If someone had been paying attention, they would have had almost an entire year of warning before the through-the-roof spike in the beginning of 2008. Time to sell stocks, short stocks, lock in customers, and reduce inventory.