In search of a job: Forecasting employment growth using Google Trends

Publikation: Working paperForskning


  • rp19_13

    Forlagets udgivne version, 2,43 MB, PDF-dokument

We show that Google search activity on relevant terms is a strong out-of-sample predictor for future employment growth in the US over the period 2004-2018 at both short and long horizons. Using a subset of ten keywords associated with “jobs”, we construct a large panel of 173 variables using Google’s own algorithms to find related search queries. We find that the best Google Trends model achieves an out-of-sample R2 between 26% and 59% at horizons spanning from one month to a year ahead, strongly outperforming benchmarks based on a large set of macroeconomic and financial predictors. This strong predictability extends to US state-level employment growth, using state-level specific Google search activity. Encompassing tests indicate that when the Google Trends panel is exploited using a non-linear model it fully encompasses the macroeconomic forecasts and provides significant information in excess of those.
Antal sider49
StatusUdgivet - 22 aug. 2019
SerietitelCREATES Research Papers


  • Google Trends, Forecast comparison, US employment growth, Targeting predictors, Random forests, Keyword search

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