Nowcasting unemployment using neural networks and multi-dimensional Google Trends data

This article forms an attempt to expand the ability of online search queries to predict initial jobless claims in the United States and further explore the intricacies of Google Trends. In contrast to researchers who used only a small number of search queries or limited themselves to job agency explorations, we incorporated keywords from the following six dimensions of Google Trends searches: job search, benefits, and application; mental health; violence and abuse; leisure search; consumption and lifestyle; and disasters. We also propose the use of keyword optimization, dimension reduction techniques, and long-short memory neural networks to predict future initial claims changes. The findings suggest that including Google Trends keywords from other dimensions than job search leads to the improved forecasting of errors; however, the relationship between jobless claims and specific Google keywords is unstable in relation to time.