Google: Central Banks' New Economic Indicator

Margo Sugarman spent months last year searching on Google for double ovens, low-noise mixers, and other appliances to complete her dream kitchen. Not only did those queries guide the Tel Mond (Israel) resident to the best deals for her 70,000 shekel ($17,680) renovation, they also helped the Bank of Israel, which looks to searches such as Sugarman’s to assess the state of the nation’s $243 billion economy.

Israel’s central bank is at the forefront of the hunt for new economic indicators. It analyzes keyword counts on Google for everything from aerobics classes to refrigerators to gauge consumer demand before releasing government statistics. The bank is not alone. The Federal Reserve and the central banks of Britain, Italy, Spain, Turkey, and Chile have followed Israel’s lead with their own studies to see if search volumes on Google correlate with broader economic trends.