Correction: Jobless Claims Likely to Be In-Line with Consensus this week

There appears to have been a glitch in the data analyzed for yesterday's post. Insights for Search was listing an 18% lift in popularity for key searches in yesterday's evaluation; today's data shows a different story (highlighted below).

The reason for the discrepancy is currently under investigation and I apologize for the confusion.

The current data reflects no major changes in the key searches, which indicates a likely flat week for initial claims, in line with consensus expectations.

Initial Jobless Claims Likely to Miss Consensus this Week

This upcoming Thursday, September 3rd, the initial jobless claims report for the week ending 8/28 will be released. Initial claims have been trending downward over the past weeks, which is a positive sign for the economy, as job retention has been looking fairly stable.

The consensus pick for this week's data is a continuing trend downward, with an expectation around a 1.5% drop. Looking at the search data, however, indicates that there was a sharp increase in searches for key unemployment-driven queries.

On July 16th, we posted the correlation between key searches for unemployment and jobless claims. While it is unlikely that this week's jobless claims release will increase by 18% (as searches have week over week), it is highly likely that the concensus pick will miss the mark in the wrong direction.

[PLEASE NOTE THIS POST HAS BEEN UPDATED TO REFLECT NEW, CONTRARY DATA]

Predicted Housing Starts Number Hits the Mark

On July 23rd, Markets with Search posted an estimate of where the housing starts number would move for the month of July. The post predicted that we would see flat movement in the data, which was the case.

August 18th data showed that the SAAR for housing starts went from 0.582M to 0.581M. We look forward to continuing hitting these predictions in the future.

The Predictability of Search Trends

Google today posted a new insight into the predictability of where search trends will move. The study revealed that with a simple time series forecast, slightly over half of the queries on Google are able to be predicted with high accuracy.

These time series analyses allow you to create a deviation away from where a predicted trend will move toward. Positive and negative misses can help you in benchmarking where a current trend is deviating toward. The other (glass half empty) view is to showcase that another half of Google queries are unpredictable. As we saw with the iPhone data, major releases can serve as an indicator of where current performance of sales is trending. This allows us to get a pulse on where the purchases move relatively.

Using search data to influence your investment decisions is a happy medium between those queries that we can predict and those which roll with the tides. The Google Research Blog post shows the full white paper analysis.

Evaluating the Impact of Cash for Clunkers

The recent CARS (aka “Cash for Clunkers”) campaign has driven the media into frenzy into whether the program is going to be a wild success or wild failure. Taking politics aside, we took a look at searches indicating interest for car purchases.

Ford (NYSE:F) numbers released today show an increase in July sales of 2%. Looking at the overall search numbers, this trend appears to be moving in the north-bound direction. Use search to keep a relative pulse on where consumers are moving their money to buy new vehicles such as Honda (NYSE:HMC) and Toyota (NYSE:TM).

The jury remains out on how Cash for Clunkers will impact policy, but its impact on general car sales for July and August are significantly high. While a seasonable positive bump is expected for these months, stay close to how new car sales are trending with indications of interest through search.