A new index is using AI tools to measure U.S. economic growth in a broader way
- The Zeta Economic Index, launched Monday, uses generative AI to analyze what its developers call "trillions of behavioral signals" to score growth on both a broad level and for stability.
- In June, both measures had good news, with the economic score at 66 and the stability index at 66.1.
Measuring the strength of the sprawling U.S. economy is no easy task, so one firm is sending artificial intelligence in to do the job.
The Zeta Economic Index, launched Monday, uses generative AI to analyze what its developers call "trillions of behavioral signals," largely focused on consumer activity, to score growth on both a broad level of health and a separate measure on stability.
At its core, the index will gauge online and offline activity across eight categories, aiming to give a comprehensive look that incorporates standard economic data points such as unemployment and retail sales combined with high-frequency information for the AI age.
"The algorithm is looking at traditional economic indicators that you would normally look at. But then inside of our proprietary algorithm, we're ingesting the behavioral data and transaction data of 240 million Americans, which nobody else has," said David Steinberg, co-founder, chairman and CEO of Zeta Global.
"So instead of looking at the data in the rearview mirror like everybody else, we're trying to put it out in advance to give a 30-day advanced snapshot of where the economy is going," he added.
The eight verticals the economic index uses include automotive activity, dining and entertainment, financial services such as credit line expansion, health care, retail sales, technology and travel.
For the stability measure, the index will look to gauge consumers' ability to handle gyrations in the economy.
Together, the goal is to provide something more expansive than gross domestic product and similar measures to gauge growth.
In June, both measures had good news, with the economic score at 66 and the stability index at 66.1. Respectively, the two readings correspond to "active" and "stable" regarding the health of the economy.
"This is maybe a more holistic way of really predicting the economy because not only are you taking the existing economic indicators around GDP, employment, all the different reporting that comes down on different vertical sales, you're layering on top of it," Steinberg said.
"We're really looking at what they're actually spending. We're looking at what they're actually reading and researching," he added. "We're seeing all of that information, which allows us to build a better forecast."