Insight on Google and Unemployment

In a series of posts (here, here, and here), I have expressed concern that Google directs its users to what I think is the “wrong” measure of unemployment. For example, if you search for “unemployment rate United States” today, it will tell you that the U.S. unemployment rate in August was 9.6%, when the actual figure is 9.7%.

This discrepancy arises because Google directs users to data that haven’t been adjusted for seasonal variations. Almost all discussions of the national economy, however, use data that have been seasonally-adjusted. Why? Because seasonally-adjusted data (usually) make it easier to figure out what’s actually happening in the economy. The unemployment rate always spikes up in January, for example, because retailers lay off their Christmas help. But that doesn’t mean that we should get concerned about the economy every January. Instead, we should ask how the January increase in the unemployment rate compares to a typical year. That’s what seasonal adjustment does.

My concern about Google’s approach is that many (if not most) data users know nothing about seasonal adjustment. They simply want to know what the unemployment rate is and how it has changed over time. Directing those users to the non-seasonally-adjusted data thus seems like a form of search malpractice.

I’ve wondered why Google has chosen this approach, and thus was thrilled when reader Jonathan Biggar provided the answer in a recent comment. Jonathan writes:

I reported the unemployment data issue internally at Google a month or so ago. I’m still waiting for definitive action on it, although one response I got was that an advantage to seeing the non-seasonally-adjusted data was that it can be compared against state and local unemployment data, which is not available in seasonally-adjusted form.

But even so, what Google has now needs a prominent explanation and a pointer to the seasonally-adjusted data, if nothing else.

This is a good sign, not least because it indicates some logic to Google’s decision thus far. In short, Google wants to satisfy another crucial goal in providing data to its users: whenever possible, the data should be comparable. Suppose, for example, that a user is looking at the unemployment rate for Anchorage, Alaska and wants to compare it to the national unemployment rate. The Anchorage rate is available only without seasonal adjustment and so, as Google argues, it makes the most sense to compare it to the national unemployment rate without adjustment as well:

(Random factoid: the not-seasonally-adjusted unemployment rate in Anchorage spikes in February, not January.)

Google is absolutely right to worry about such comparability. However, their way of implementing it has an unfortunate side-effect. In order to ensure comparability, Google reports all unemployment rates without seasonal adjustment, even though seasonally-adjusted figures are often available.

Specifically, seasonally-adjusted data are available for the U.S. as a whole and (contrary to what Jonathan was told) for each of the individual states. For smaller areas, however, only the non-adjusted data are available.

Under Google’s current approach, all data users have to make do under the limitations that apply only to data for the smaller areas.

Here’s my advice for Google:

• I realize it’s more work, but your data base should include both seasonally-adjusted and non-seasonally adjusted data, whenever both are available.

• Users should be directed to seasonally-adjusted data whenever they are available (e.g., in searches for the U.S. as a whole or for individual states).

• Users should be directed to non-adjusted data when they are the only data available.

• Users should be able to switch between the two types of data at will.

• One way to do this would be to have a check box at the top of the list of places on the left hand side of the screen that allow users to toggle between adjusted and non-adjusted.

• As Jonathan suggests, there should be some sort of prominent link to a short explanation of the difference between the series.