During normal times, traditional economic data work fine, offering reliable insight into growth, employment, prices and all sorts of other aspects of the U.S. economy. The drawback is that delays of as long as a month or even a quarter make some of the data of limited use during times like these, when a pandemic has thrown the entire economy off kilter.
So there's a case to be made for the merits of alternative data — everything from new infection rates to apartment rental rates near college campuses — which can offer daily reads of the state of the economy, provided they are used with the appropriate caveats. We recently asked several Bloomberg Opinion writers to cite some of the non-conventional metrics they're paying attention to during the coronavirus recession.
El-Erian Weighs In
Mohamed A. El-Erain writes about economics, markets and central banks for Bloomberg Opinion. He is the chief economic adviser at Allianz SE, the parent company of Pimco, where he served as CEO and co-CIO:
As many traditional data reports are deemed mostly out of date even before they are released, economists have had no choice but to expand the data they monitor and how they are analyzed.
This means paying a lot more attention to higher-frequency data, such as daily mobility indicators, retail traffic and restaurant dining.
Second, epidemiological metrics -- the coronavirus R-naught infectious rate, hospitalizations and fatalities -- are critical to follow for their insights into key influences on household and business behavior, as well as the thinking and actions of policy makers.
Measures of financial resilience and solvency become even more important given uncertainties about how long we will be living with Covid-19. In addition to the usual balance-sheet data, debt rollovers and access to new financing, this expands to include highly micro anecdotal indicators such as the number of people turning to food banks.
None of these measures are perfect. Moreover, they don’t make up for the inaccuracies that accompany virtually any forecast these days. But they do help to shed more light on our unprecedented economic situation, as well as help shape the questions we should be asking.
Dining Out
Jim Bianco writes about markets and economics for Bloomberg Opinion. He is the president and founder of Bianco Research, a provider of data-driven insights into the global economy and financial markets:
As summer turns to fall, attention will turn to the presidential election. How should investors measure the horse race? More importantly, how can one judge if an event is changing the outlook for the election? Enter the betting markets, such as the political betting site predictit.org.