A U.S. Recession Isn't Imminent If You Look at Google Trends 

(Bloomberg) -- Google search terms that were leading indicators of the Great Recession aren’t signaling that the current record U.S. expansion is poised to end any time soon.

That’s according to DataTrek Research co-founder Nicholas Colas, based on his reading of Google Trends data tracking queries for coupons, unemployment and television. Coupon searches are a leading indicator that U.S. consumers will seek product and service discounts as economic uncertainty increases, and they precede the actual deferral of purchases that traditional indicators measure because that doesn’t start to show in the data until unemployment is rising, Colas said in a note to clients Wednesday.

People search for answers about unemployment “when they fear a layoff is imminent, allowing Google Trends to act as a useful leading indicator,” Colas wrote with fellow co-founder Jessica Rabe. They said weekly initial jobless claims and the monthly payrolls report only capture employment trends after layoffs have already begun. Searches for television, YouTube and Netflix tend to coincide with cuts to overtime hours that give workers more time to consume media, they said.

“These three indicators give us little cause for concern just now,” they wrote. “If the Federal Reserve looked at Google Trends they might not be so inclined to cut rates next week.”

Google Trends show U.S. searches for “coupon” this year have been hovering around the lowest level since 2010, and generally have been trending lower in recent years after a big upswing from 2007 to 2011.

“Unemployment” searches, which began rising in early 2007, now remain near one of the lowest levels in data back to 2004. The Labor Department’s official jobless rate remains just above the lowest reading since 1969. Searches for “TV,” which peaked in 2009, also remain near the lowest level in available data.

To contact the reporter on this story: Jeff Kearns in Washington at jkearns3@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle, Alister Bull

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