Google eyes online consumer index to track inflation

October 12, 2010
US Internet titan Google is readying its own "Google Price Index" based on a vast database of online purchases, providing a daily measure of inflation, said a top company official quoted in the Financial Times.

US Internet titan Google is readying its own "Google Price Index" based on a vast database of online purchases, providing a daily measure of inflation, said a top company official quoted Tuesday in the Financial Times.

Google has not yet decided whether it will publish the index (GPI), which is still in development, the group's chief economist Hal Varian said at the National Association of Business Economists conference in Denver, Colorado.

Varian said the GPI indicates a "very clear deflationary trend" for goods purchased online in just under a year of data gathering, a potentially worrying prospect for US officials.

The GPI, calculated differently from official statistics of -- a key indicator of US economic growth -- as it only accounts for products sold on the Internet, but can be a much faster tool as results could be modelled at real-time speed.

The most recent official data from the Commerce Department was released at the beginning of October and showed in August. Those figures showed spending rose 0.4 percent in August as spent slightly more than expected for the second straight month.

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knikiy
not rated yet Oct 12, 2010
This would be great since the CPI ironically excludes the items that most directly effect quality of life, such as food and energy prices. But we may still be missing these metrics in this case, since not many folks buy the bulk of their food and gasoline online. Or, on a more cynical note, it could just be another source of dis-information filtered through vested interests in order to manipulate public opinion.

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