Sizing up the economy

It's not very encouraging:

• Every day, the U.S. government takes in $6 billion and spends $10 billion. This means that every day the federal government spends $4 billion more dollars than it has.
• The real unemployment rate is a jaw-dropping 11 percent.
• Every fifth man you pass on your way to work is now out of work.
• College graduates are now 34% less likely to find a job under Obama than they were under President George W. Bush.
• Every seventh person you pass on the sidewalk now relies on food stamps.
• The ravages of the Obama economy now mean that more Americans live under the federal poverty line than at any time in U.S. history since records have been kept.
• Under President Barack Obama, every fifth child in America now lives in poverty.

Some spooky economic numbers

Some conversation fodder for your merry Christmas party:

• If the number of Americans that "wanted jobs" was the same today as it was back in 2007, the "official" unemployment rate put out by the U.S. government would be up to 11 percent.

• The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.

• One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.

• There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.

• Since December 2007, median household income in the United States has declined by a total of 6.8% once you account for inflation.

• A Gallup poll from earlier this year found that approximately one out of every five Americans that do have a job consider themselves to be underemployed.

• Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.

• One recent survey found that one out of every three Americans would not be able to make a mortgage or rent payment next month if they suddenly lost their current job.

Collecting economic data the Google way

Google’s chief economist, Hal Varian, did some online shopping recently and came up with the idea for a Google Price Index.

“A tragedy struck our house a few months ago because my favourite pepper grinder broke.” On typing ‘pepper grinder’ into Google Shopping, Mr Varian was struck by the list of prices. “What’s the first thing you want to do if you’re an economist? You want to construct a price index,” Mr Varian said.

Varian emphasised that the GPI is not a direct replacement for the CPI because the mix of goods that are sold on the web is different to the mix in the wider economy.

Housing accounts for about 40 per cent of the US CPI, for example, but only 18 per cent of the GPI. The GPI shows a “pretty good correlation” with the CPI for goods such as cameras and watches that are often sold on the web, but less so for others, such as car parts, that are infrequently traded online.

Varian is looking at other ways of using Google’s search data for economic forecasting. He said that he is working on “predicting the present” by using real-time search data to forecast official data that are only released with time lags. For example, searches for “unemployment insurance” may be a good tool to predict actual claims for unemployment insurance, or the unemployment rate.