Now-And Forecasting Unemployment from Google's Job-Search Activity

Big data trends, have gained popularity among practitioners for its potential applications on accurate econometric prediction. This paper presents an application where unemployment job search indicators for the G7 countries are based on Google trends data. For each country, a set of google search keywords is identified, then a data reduction technique is applied to estimate our unemployment indicator which is considered a latent common trend. Finally the predictive performance of our indicators is assessed by an automatic stochastic specification with respect to unemployment levels and other key labour market outcomes.