Google may or may not be great at helping you find a job, but data based on the amount of job-search made with the popular search engine seem to be useful in improving unemployment forecasts.

Two researchers affiliated with the Bank of Italy – Juri Marcucci and ISER’s Francesco D’Amuri, have published a paper in which they show that data on job-search activity via Google can be a good a leading indicator of the future unemployment rate in the United States, improving the performance of sophisticated models usually employed to predict how many people will be looking for a job in the coming months.

The paper, Google It! Forecasting the US Unemployment Rate with A Google Job Search Index, shows with lots of statistics that counting the rate of change in the number of times that people do a search on Google from the US for the word “jobs” definitely improves the forecasts of the future unemployment rate, both at the federal and at the state level and in comparison with the Survey of Professional Forecasters published by the Philadelphia Federal Reserve Bank.

To create their unemployment rate predictor, the researchers gathered up the Google index for some popular job-search related words such as “jobs” and “job offers”.

After gathering this Google index data on a weekly and monthly basis, they decided that the keyword search term “jobs” was doing something interesting, and so they performed a “deep out-of-sample comparison” with 520 different forecasting models, which are based on all manner of statistics as inputs to try to divine what the future unemployment rate will be.

Specifically, what the researchers showed is that between January 2007 and June 2009, the Google index for the search term “jobs” can be used to augment existing models and improve dramatically one, two, and three-month forward looking projections of the US unemployment rate. Google data has been used in similar ways in recent years, notably in November 2008 when Google itself showed that it could track the spread of the influenza virus by tracking where people were searching for the word “flu”. Google shared search data with the Centers for Disease Control for the 2007-2008 flu season and found a reasonably tight correlation between searches for the word flu and the official flu outbreak maps from the CDC. This was called Google Flu Trends.