Data Trends for Investment Professionals

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Data alternatives – and alternative data – to use during U.S. government shutdowns

The US government shutdown ended on January 25, but with funding only restored until this Friday (February 15), analysts, economists, and other data-dependent specialists may be again in need of reliable alternatives.

The 35-day shutdown was the longest ever and left many users – even the Federal Reserve – without the data needed for investment and policy-making decisions.  The most notable gaps were in data collected and released by of the Bureau of Economic Analysis (BEA) and the Census Bureau, both under the Commerce Department. Also sidelined were the Department of Agriculture’s National Agricultural Statistics Service and its Economic Research Service. The Pew Research Center had a good primer on the main data casualties.

Even if the shutdown does not resume – and a tentative deal between the House and Senate makes another one less likely – there will still likely be gaps in data releases. The BEA on Feb 6 noted new release dates for delayed datasets relating to gross domestic product, personal income, and International trade, with several pushed back by a month. Fortunately, analysts have been able to turn to alternative data for insights.

While Quandl’s publication of US government data is also affected by government shutdowns, we do have alternative and core financial datasets that can offer insights and serve as proxies for missing datasets.

Alternative Data

Quandl’s Alternative Data Portfolio includes several products that can supplement missing US government data, typically providing signals ahead of government-issued reports. For instance, subscribers to Quandl’s Auto Sales Estimates – extrapolated from sales of new car insurance policies – receive those estimates ahead of the official release of the BEA’s data on New Vehicle Sales.

Alternative datasets useful during a possible shutdown include:

Auto Sales Estimates: Predicted daily US auto sales by manufacturer and model, extrapolated from sales of new car insurance policies by major insurance firms. Includes accurate Tesla sales estimates. Unique data, proven to be predictive of stock price movements.

Company Spending and Payments: Spending patterns hold information about company plans, performance and profitability that is typically not available in financial statements. Payment patterns hold information about cash management strategies, credit lines and financing. This product delivers both spending and payment patterns for publicly listed companies. Spending is broken down into 50 detailed categories.

Economic Indicators from Legal Services: This monthly aggregate data product consolidates legal inquiries from consumers across the US and parts of Canada. Covering 19 million consultations from 1.7 million consumers, this dataset is ideal for investors wanting advance insight on macro factors including consumer confidence, housing starts, existing home sales, foreclosures and bankruptcy indicators.

LTL Truck Movement: Truck activity is a leading indicator for transportation sector equity performance. This dataset tracks location and trip information for 20,000 commercial trucks in the less-than-truckload (LTL) shipping segment, via a network of embedded sensors. It can also be used to study e-commerce patterns, manufacturer performance, and flow of freight.

US Construction Activity: This exclusive dataset is the most comprehensive construction data available. This data product tracks 500,000 yearly projects, accounting for $700 billion annual spending and 80% US construction activity. The dataset is ideal for investors in real estate and construction, as well as those looking for insight on macro indicators such as economic growth, construction spending and payrolls.

US Job Listings by Company: This product, based on data collected by a leading labor market research and analysis firm, offers daily job posting activity, tagged with the associated company, ticker symbol, position title, sector and job location. The data is unique and comprehensive: richer and deeper than other employment data currently available on the market.

Core Data

Quandl provides a comprehensive catalogue of US national statistics – both premium and free. These datasets include official government releases and other indices that depend on official numbers. Some of these would be affected by government shutdowns. However, there are numerous datasets from the private sector and academia that can provide insight in the absence of government data. These include:  

US Housing Indices: Data on home prices, purchases, and other indicators are highly valuable economic indicators. Quandl offers a variety of datasets from multiple sources – both premium and free – including National Association of Home Builders/Wells Fargo indices for national and regional markets. 

Manufacturing Activity: Institute for Supply Management has 25 datasets tracking economic activity in the manufacturing sector, publishing data on production and supply chains, new orders, inventories, and capital expenditures.

Zillow Real Estate Research: Real estate and rental marketplace Zillow provides free datasets including home prices and rents by size, type and tier; housing supply, demand and sales; sliced by zip code, neighbourhood, city, metro area, county and state. Data is updated monthly.

Consumer Sentiment: Produced by the University of Michigan, this sentiment indicator – data points for the most recent six months are unofficial; they are sourced from articles in the Wall Street Journal. 

Learn more

With more than 25 million datasets, the above represent a sampling of data on Quandl that can serve as proxies for official data that may be impacted by government shutdowns. For specific data, users can search our core financial data portfolio or contact us for more information about premium alternative data products.

 

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