Predicting Unemployment

Bill Tancer from Hitwise has created an interesting application using their data. You can read his post here. His thinking was that people are increasingly likely to use online methods to file for unemployment. He then tracks the search term “unemployment” as well as collects data from state unemployment websites. Since Hitwise collects this information on a daily basis, and the US Department of Labor releases the official statistics with la lag of a few days, Tancer can use the Hitwise data to predict the change in unemployment rates before they are announced. Even though the model is, by the author’s admission, in the early stages, I think this is a novel way of using inexpensive data to increase the speed of unemployment predictions.