Beige Book with Google “Trend” Mashups

Discussion in 'Economics' started by nutmeg, Mar 8, 2013.

  1. Great article from zero hedge if you like this sort of stuff. I remember doing my first "mashup" back when paper bags were still king. I could walk in the warehouse and take a quick look at the inventory of paper bags and tell you how much money was in the register. I was just that kind of guy.{:>)

    "Today’s mashup is a comparison of the Federal Reserve Beige Book, released yesterday, and the Google Trends online dataset. I’ll assume everyone knows the basic outlines of the Beige Book – Fed districts collect a range of anecdotal information about the economy and summarize it for the public.

    The Google Trends data is simply a count of the number of times a given search has been punched into that open box on You can slice and dice the data by timeframe, where the search was geographically initiated, and compare different queries for relative popularity. "


    Auto sales lead the Fed’s summary of consumer spending, and the tenor here is certainly strong. The Beige Book notes “Strong or solid” demand in most Districts. As we noted in yesterday’s note, however, dealer inventories are starting to pile up. Is demand as great as the Fed says?

    The Google Trends data for the search “Buy a car” is trending higher, about 30% better than the 2007 trough. At the same time, demand is not at all-time levels – those occurred in September/October last year. Now, it could be that seasonality is at play here – Q4 is not a great time for car sales, with the exception of all those year-end specials. Bottom line – the trend here looks like the Fed has it right.

    “Tourism strengthened in a number of Districts,” so says the Fed. That’s odd – just consider how poor consumer spending has been in the wake of the 2% point increase in withholding for Social Security.

    Google Trends has the answer: searches for “Vacation package” and “Cheap airfare” have bounced very modestly, but off of very low levels. According to the indexed volume which Google displays (and you can see for all these topics in the graphs after this note), search volume for these phrases is currently a “20” reading. In 2004, it was 100. Bottom line: dead cat bounce here, although the notice about the good attendance at the American Birkebeiner cross country ski race in northwestern Wisconsin (Ninth District – MN notes) is a nice shout-out.

    On prices, the Fed noted that ‘Pressures remained modest.” In addition, the Beige Book authors noted that “Plans to increase selling prices were limited among District contacts.

    This is a major bone of contention, as it does feel like inflation is gaining steam. To test that theory, we checked on the Google traffic for the word “Coupon.” This search and its frequency should be an excellent indicator for both consumer financial stress and concerns over higher prices. As the accompanying chart shows, searches for coupons are in fact about 3x where they were pre-crisis, but 40% below where they were at the peak. In any case, the current levels seem to show that the Fed is right – overall, consumers aren’t (yet) worried enough about inflation to seek out coupon deals.

    Finally, let’s turn to residential housing, the hoped-for star of the 2013 U.S. economy. The Beige Book is replete with anecdotes about multiple offer situations for houses listed for sale and generally good feelings all around.

    The Google Trends data largely concurs. The phrase “How much is my house worth?” is back to 2009 levels. Hopefully this time the trend that users see will be positive. “Build a house” search volumes are also up 50% from the bottom. “Get a mortgage” is up over 100% from its lows a few years ago, even though seasonally it should be pretty weak right now.

    cont on link..
  2. Score:

    12 - 22 - Got some financial redneck potential in you



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