If what Americans are searching for on Google is any hint of what’s next for the economy, it could mean a recession is nearing.
Search trends for “recession,” “2020 recession,” and “how to prepare for a recession,” spiked on Aug. 14, the reason: the inversion of the 2-year and 10-year yield curve on Aug. 14 at 6:00 am est., was the first time since the summer of 2007, reminded everyone that just one year later , a financial crisis emerged.
Preliminary data from Google Trends shows the popularity of “recession” across the US is the highest since Feb/March 2009. “Recession” is being searched the most in the District of Columbia, Delaware, Maryland, Massachusetts, and Connecticut.
The top five cities where “recession” is being Googled the most is in Irvine, Washinton, San Jose, Boston, and Raleigh.
Google’s top related queries for “recession” include “the recession,” “great recession,” “a recession is,” “what is a recession,” and “economic recession.” All of these keywords have jumped since the 2-10 curve inverted last Wed.
From 3Q18, searches for “2020 recession” were gradually rising. It was only until the 2-10 curve inverted. The keyword has since exploded across the country.
One search phrase that has absolutely rocketed higher is “how to prepare for a recession.” Americans in Washington, Utah, Michigan, Maryland, and Indiana Googled it the most.
If the Federal Reserve looked at these recent search trends, nevertheless the Trump administration, they would be horrified because it takes animal spirits and the belief in the “greatest economy ever,” to get consumption flowing into the service sector, which is about 75% of the economy. Any pullback in consumption could spell disaster for the economy in 2020.
August marks the point where the average American discovered the “greatest economy ever” is running out of steam.
After the 2-10 curve inverted, almost every financial news outlet across the country produced stories of economic doom, and this can easily alter animal spirits of consumers, forcing many into conservative spending habits or holding patterns, while they wait for a downturn to pass.
All of this is happening as US consumer sentiment plummeted to a seven-month low late last week on growing concerns the economy is cycling down through 2H19.
So is the jump in “recession” searches on Google a good indicator of what’s next for the economy in 2020?