Researchers at the Federal Reserve Bank of San Francisco have discovered an economic indicator better than consumer sentiment surveys — journalists and their reports on the economy.
Mark Calvey of the San Francisco Business Times reports, “The S.F. Fed researchers told the San Francisco Business Times that they saw their project as ‘proof of concept’ on the value of using big data analysis to assess tens of thousands of news articles to create a news sentiment index.
“‘Computers could go through news articles on a daily basis and scan them instantly’ to determine economic sentiment captured by reporters and their sources, S.F. Fed research adviser Dan Wilson said.
“The findings are all the more surprising as they come in an era of ‘fake news’ and widespread criticism of the media from the White House and beyond.
“The S.F. Fed’s findings on journalists reflecting ‘news sentiment’ are worth careful consideration, given the value of being able to detect shifts in economic growth and contraction.
“‘In most cases, the news sentiment indexes have more predictive power than the consumer sentiment measures in head-to-head comparisons,’ Wilson and S.F. Fed research adviser Adam Hale Shapiro wrote in a report released this week titled, ‘What’s in the News? A New Economic Indicator.'”
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