What Google Trends say about euro area consumption

Measuring how consumption develops is always important when assessing the economic outlook. But it is of particular importance at this point in the context of very high inflation. One familiar problem in assessing consumption dynamics is the long delay for hard data publication . Our index shows that Google T rends data gave a timely indication of the direction of consumer behavior. We saw during the lockdown phases, C ovid related themes going up and consumption and services related themes going down. Looking ahead , the Google T rend s data point to the adverse effect of inflation on consumption and there is a clear negative correlation between inflation and G oogle T rend s data.