From Transactions Data to Economic Statistics: Constructing Real-time, High-frequency, Geographic Measures of Consumer Spending
Access to timely information on consumer spending is important to economic policymakers. The Census Bureau’s monthly retail trade survey is a primary source for monitoring consumer spending nationally, but it is not well suited to study localized or short-lived economic shocks. Moreover, lags in the publication of the Census estimates and subsequent, sometimes large, revisions diminish its usefulness for real-time analysis. Expanding the Census survey to include higher frequencies and subnational detail would be costly and would add substantially to respondent burden. We take an alternative approach to fill these information gaps. Using anonymized transactions data from a large electronic payments technology company, we create daily estimates of retail spending at detailed geographies. Our daily estimates are available only a few days after the transactions occur, and the historical time series are available from 2010 to the present. When aggregated to the national level, the pattern of monthly growth rates is similar to the official Census statistics. We discuss two applications of these new data for economic analysis: First, we describe how our monthly spending estimates are useful for real-time monitoring of aggregate spending, especially during the government shutdown in 2019, when Census data were delayed and concerns about the economy spiked. Second, we show how the geographic detail allowed us quantify in real time the spending effects of Hurricanes Harvey and Irma in 2017.
We thank especially Dan Moulton, Aaron Jaffe, Felix Galbis-Reig, and Kelsey O’Flaherty for extensive work and conversations in constructing these new spending indexes. We also thank Zak Kirstein, Tommy Peeples, Gal Wachtel, Chris Pozzi, Dan Williams, and their colleagues at Palantir who have been integrally involved in implementation. The views expressed here are those of the authors and not necessarily those of other members of the Federal Reserve System or the National Bureau of Economic Research.
Forthcoming: From Transactions Data to Economic Statistics: Constructing Real-Time, High-Frequency, Geographic Measures of Consumer Spending, Aditya Aladangady, Shifrah Aron-Dine, Wendy Dunn, Laura Feiveson, Paul Lengermann, Claudia Sahm. in Big Data for Twenty-First Century Economic Statistics, Abraham, Jarmin, Moyer, and Shapiro. 2021