Google eyes online consumer index to track inflation

Afp
Wednesday 13 October 2010 00:00 BST
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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 consumption - 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 consumer spending in August. Those figures showed spending rose 0.4 percent in August as consumers spent slightly more than expected for the second straight month.

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