Joseph Sullivan examines whether inflation has peaked using a Google search data:
To expect Google’s data on searches for “inflation” to confess at least some accurate information about forthcoming official consumer price data is only to expect it to behave now as it has in the past. Between January 2011 and April 2022, the monthly value of the Google Trend for “inflation” registered a correlation of 0.72 with the year-over-year change in that month’s overall consumer price index. For context, a correlation of between 0.7 and 0.8 puts the predictive relationship between the two on par with the predictive relationship between Body Mass Index and body-fat percentage. Having increased from 82 in April to 100 in May, if the previous data are any indication, the Google Trend now foreshadows that Friday’s release of official inflation data for May will show an uptick, perhaps around 9 percent year-over-year.
Read the whole thing here.