David A. Steinberg, CEO of Zeta Global Holdings, at the New York Stock Exchange.
Source: New York Stock Exchange
Measuring the strength of the growing U.S. economy is no easy task, so one company is sending in artificial intelligence to do the job.
The Zeta Economic Index, launched Monday, uses generative artificial intelligence to analyze what its developers call “trillions of behavioral signals,” largely focused on consumer activity, to score growth on a broad level of health and a separate measure of stability.
At its core, the index will measure online and offline activity across eight categories, aiming to provide a comprehensive view that combines standard economic data points like unemployment and retail sales, along with high-frequency information for the age of artificial intelligence.
“The algorithm looks at the traditional economic indicators that you would normally look at,” said David Steinberg, co-founder, chairman and CEO of Zeta Global. “But inside our proprietary algorithm, we ingest behavioral and transactional data from 240 million Americans that no one else has.”
“Instead of looking at the data in the rearview mirror like everyone else, we're trying to put it out in advance to give a 30-day picture of where the economy is going,” he added.
The eight sectors used by the economic index include automotive activity, restaurants and entertainment, financial services such as extending lines of credit, health care, retail sales, technology and travel.
In terms of the stability measure, the index will seek to measure consumers' ability to cope with fluctuations in the economy.
The common goal is to provide something more comprehensive than GDP and similar measures of growth.
In June, both measures were good news, with the economic score at 66 and the stability index at 66.1. The readings correspond to “active” and “stable” in terms of economic health, respectively.
“This is probably a more comprehensive way of really forecasting the economy because you're not just taking the economic indicators that are out there around GDP and employment and all the different reports that come out around different vertical sales, you're layering them on top of that,” Steinberg said.
“We're actually looking at what they're actually spending. We're looking at what they're actually reading and searching for. We're seeing all of this information, which allows us to build better predictions,” he added.
