Economic data is produced on a delay, “Right now, we rely very heavily on this peculiar process where we forecast an estimate of the past,” said Joseph Stiglitz, a Nobel Prize-winning economist at Columbia University. In a world of data scientist many are looking to improve the forecasting process. The Federal Reserve updates its economic forecasts every quarter. Economists update their estimates monthly. Now startups are competing to use big data to accelerate forecasting. One company, Now-Cast updates forecasts in real time.
Official economic data is built around government surveys and records that take a month or more to compile. Investors and policy makers make decisions about today’s economy even though they won’t have data on its health for weeks or months. The nation’s economic data agencies are continually working to make their data faster and more comprehensive. The Labor Department, for example, is seeking funding to make its monthly survey on job openings and turnover come out just a few days after the month’s end, instead of the subsequent month. The Commerce Department recently unveiled quarterly reports of gross domestic product by state and by industry, upping the pace from annual. But official real-time dashboards remain a remote prospect given government funding constraints. “Right now, we rely very heavily on this peculiar process where we forecast an estimate of the past,”