Central Perk: 4 apr. 2014

vineri, 4 aprilie 2014

Mish's Global Economic Trend Analysis

Millennials Mired in "Wealth Gap" as Older Americans Gain; Housing Crash Continues to Overshadow Young Families' Balance Sheets

Posted: 04 Apr 2014 10:52 AM PDT

Thanks to Fed printing presses coupled with an extreme case of irrational exuberance, those over 40 years old have recovered losses from the great financial collapse.

However, Millennials Remain Mired in Wealth Gap, as Others Recover.

For households headed by someone 40 years old or younger, wealth adjusted for inflation remains 30 percent below 2007 levels on average, according to research by economists at the Federal Reserve Bank of St. Louis. Net worth for older Americans has already recouped the losses.

Such a generational divide has negative implications for consumer spending, which accounts for almost 70 percent of the economy. Younger households tend to spend a greater share of their incomes in furnishing new homes and buying automobiles, in contrast to their older counterparts who save more as they inch closer to retirement.

Homeownership rates for 35 to 44 year olds dropped 6.3 percentage points to 60.9 percent as of the fourth quarter 2013 from the end of 2007, Census data show. For households under 35, the rate dropped 4.2 points to 36.8 percent. Meanwhile, 71.3 percent of 45 to 54 year olds and 77 percent of those 55 to 64 own a home.

The average value of housing on young families' balance sheets remains about 35 percent below its 2007 level, the St. Louis Fed paper estimates.

"These changes going on with individual balance sheets could have impacts on the whole economy," said William Emmons, an economist at the St. Louis Fed who co-authored the study published in February with Bryan Noeth. "Maybe this is one of the reasons that it's been so hard to understand this weak recovery. Not enough people are looking at these."

Weak Recovery Easy to Understand

There is nothing hard to understand about the weak recovery. I predicted this outcome years ago. On May 22, 2008 I wrote "Boomers will be competing with their children and grandchildren for jobs that in many cases do not pay living wages."

Many young kids are mired in student debt, working on jobs that should not even require a degree. Those kids postpone household formation, and in record numbers still live with their parents. Millennials had little to no assets for Bernanke to inflate in price.

Housing Crash Continues to Overshadow Young Families' Balance Sheets

And so here we are.

For further analysis, please see the Fed report Housing Crash Continues to Overshadow Young Families' Balance Sheets. Here are a couple of charts from the report, followed by my comments.

Real Net Worth

Since 1989 real net worth of those under the age of forty is down 8.5%.

Home Ownership Rates

For all age demographics, home ownership rates peaked right as the bubble burst. However the steepest percentage increases in ownership at the time of the collapse was those under 40.

Home prices have recovered much of their losses in many areas, but that has not done anything to alleviate the massive student loan problem. Worse yet, the home price recovery has a negative benefit for those still trapped living at home with their parents as well as those with a job but still mired in student debt, hoping at some point to buy.

Until that dynamic changes, household formation will remain weak.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Nonfarm Payrolls +192,000, Unemployment Rate Steady at 6.7%; Economy Poised to Accelerate?

Posted: 04 Apr 2014 08:17 AM PDT

Initial Reaction

Nonfarm Payrolls rose by 192,000 nearly matching the Bloomberg Consensus expectation of 200,000. Revisions to January and February added another 37,000 jobs. Private employment, which excludes government jobs, surpassed the pre-recession peak for the first time.

Beneath the surface, this was a solid report for a change as the household survey shows a strong gain in employment of 476,000.

March BLS Jobs Statistics at a Glance

Nonfarm Payroll: +192,000 - Establishment Survey
Employment: +476,000 - Household Survey
Unemployment: +27,000 - Household Survey
Involuntary Part-Time Work: +225,000 - Household Survey
Voluntary Part-Time Work: +189,000 - Household Survey
Baseline Unemployment Rate: +0.0 at 6.7% - Household Survey
U-6 unemployment: +0.1 to 12.7% - Household Survey
Civilian Non-institutional Population: +173,000
Civilian Labor Force: +503,000 - Household Survey
Not in Labor Force: -331,000 - Household Survey
Participation Rate: +0.2 at 63.2 - Household Survey

Additional Notes About the Unemployment Rate

The unemployment rate varies in accordance with the Household Survey, not the reported headline jobs number, and not in accordance with the weekly claims data.
In the past year the population rose by 2,253,000.
In the last year the labor force rose by 1,128,000.
In the last year, those "not" in the labor force rose by 1,134,000
Over the course of the last year, the number of people employed rose by 2,349,000 (an average of 195,000 a month)

The population rose by over 2 million, but the labor force rose half as much. People dropping out of the work force accounts for much of the declining unemployment rate.

March 2014 Employment Report

Please consider the Bureau of Labor Statistics (BLS) March 2014 Employment Report.

Total nonfarm payroll employment rose by 192,000 in March, and the unemployment rate was unchanged at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment grew in professional and business services, in health care, and in mining and logging.

Click on Any Chart in this Report to See a Sharper Image

Unemployment Rate - Seasonally Adjusted

Nonfarm Employment January 2003 - March 2014

click on chart for sharper image

Private Employment January 2003 - March 2014

click on chart for sharper image

Nonfarm Employment Change from Previous Month by Job Type

Hours and Wages

Average weekly hours of all private employees rose 0.2 hours to 34.5 hours. Average weekly hours of all private service-providing employees rose 0.2 hours to 33.3 hours.

Average hourly earnings of private workers fell $0.02 to $20.48. Average hourly earnings of private service-providing employees fell $0.04 to $20.25.

For further discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?

Birth Death Model

Starting January, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I keep this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back.

Table 15 BLS Alternate Measures of Unemployment

click on chart for sharper image

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 6.7%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 12.7%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Labor Force Factors

Discouraged workers stop looking for jobs
People retire because they cannot find jobs
People go back to school hoping it will improve their chances of getting a job
People stay in school longer because they cannot find a job
Disability and disability fraud

Were it not for people dropping out of the labor force, the unemployment rate would be well over 9%.

Synopsis

This was a solid jobs report. Weather-related effects were taken back and then some. The only negatives were falling hourly wages and a rise in involuntary part-time employment. Finally, if people start looking for jobs, further declines in the unemployment rate will be difficult to come by, even if job reports are generally favorable.

Economy Poised to Accelerate?

Is the economy out of the woods and poised to accelerate? I don't think so. Global imbalances are still growing, Europe is generally a basket case and China is due for a rather hard landing.

I did not believe the widely-held China decoupling theory in 2007, and I do not believe the widely-held US decoupling theory today.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

Welcome to the Ghetto

Posted: 04 Apr 2014 07:12 PM PDT

Ghetto pictures.

Watch: Five Minutes with the President

Featured

Watch: Five Minutes with the President

This week, the President wrapped up a six-day trip to Europe and Saudi Arabia, spoke on the success of the first open enrollment period of the Affordable Care Act, traveled to Michigan to highlight the importance of raising the federal minimum wage, and honored both the 2013 World Series Champion Boston Red Sox and the 2014 U.S. Olympic and Paralympic teams.

Watch the latest episode of West Wing Week:

The Rules of Link Building - Whiteboard Friday

Posted: 03 Apr 2014 04:11 PM PDT

Posted by Cyrus-Shepard

Much of marketing, especially SEO, has shifted from a game with very few rules to a game that Google is fairly strictly refereeing. With their old tactics eliciting penalties, many marketers are simply throwing in the towel.

In today's Whiteboard Friday, Cyrus Shepard calls a time-out and shows us the new strategy we need to come out on top.

For reference, here's a still of this week's whiteboard!

Video transcription

Howdy, Moz fans. Welcome to another edition of Whiteboard Friday. My name is Cyrus. Today we're going to be talking about the rules of link building. Now this is really important because we see a lot of people out there in the marketing world getting scared of link building, past actions coming back to haunt them, people saying that link building is dead, links losing value in Google's algorithm. Rand did a great Whiteboard Friday a few weeks ago about that.

But what's really disturbing is some people are giving up completely on link building when it's still a really huge part of Google's algorithm, and they're giving up because they don't know the rules. They don't understand that when you play by the rules, for the most part, you can really win. What we see, I like to think about this like a basketball game, going back to the days of the ancient Aztecs when they started playing and there weren't a lot of rules. What's happening now is we have Google, the referee in the black and white striped shirt. They're coming down and they're saying, "Hey guys, this isn't working. We need to install some order here." So they start giving out fouls and penalties to people.

Some of these people are getting frustrated, and they're leaving the game. But the people who aren't getting fouled, who aren't getting the penalties, they are winning the score. That's where we want to be. We want to be the people who are still playing the game instead of walking off the court, because these people aren't going to win. So if we understand what the rules are, and these rules I see get violated all the time, even people trying to do what they can get away with, it's not worth it. So playing by the rules is something that we want to strive for.

One thing I've heard internet marketers talk about for years is the idea of doing what works. For a long time, there was no referee on the court. Google was just absent, and people were doing whatever they wanted. People would say, "You know, I don't really care what the rules are because I'm going to do what works today for my client." People like Rand Fishkin and Wil Reynolds, they were saying, "Guys, you've got to follow the rules because the rules are coming. Don't do what works today, do what works tomorrow." That's the advice.

These rules are based not only on what works today, but what works tomorrow. Not only that you win today's game, but that you keep winning game after game after game and you win that NCAA tournament. All right.

Beware links you control

First of all, I want to start off with some things that we want to avoid when link building. If we look at what Google has been targeting, there are usually two common factors in links that they target. They are, first of all, links that you control. When we see Google crack down on guest blogging networks, on widget links, signature profile links, they all have that one element in common: that you control the anchor text. That's exactly what Google is looking for. I predict any new link penalties that happen in the future will also follow this pattern. It will be links where you control the anchor text.

We're always going to have situations where we do control the anchor text, but beware and be very careful with those links because those are the links that are subject to devaluation and penalization.

Be cautious with links that scale

The same thing goes for links that scale. Again, we're talking about widget links, author bio boxes. When you combine these two together, those are exactly the kind of links that you need to be extra special careful with and not scale, not do too much anchor text manipulation because they will always be subject to those penalties.

Don't ask for anchor text

One rule that I've been following for years, I got this from Eric Ward, the very famous link builder: Never ask for anchor text. When you're doing outreach, when you're talking to other people, when you're guest posting, asking for the anchor text is going to raise a lot of red flags. That's what kills it for you, because when you start asking for anchor text, your brain starts working. You think, "Well, I need this keyword. I need this keyword." You create patterns. You create over-optimization. No matter what the temptation is, if you don't ask for anchor text, you're going to get a much more natural link profile.

In all of the years that I've been doing link building, I have never asked for anchor text once. Whoever is linking to me can link to me however they want. Sometimes it's a no-followed link. Sometimes it's not exactly what I want. But it's natural, and it comes off so much more natural.

Don't link externally in the footer

A couple of other rules that I see people violate all the time that Google has made painfully clear in the past few months: Don't link externally in the footer. Just don't. I'm not going to go into the reasons. Just don't do that.

Avoid site-wide links

By the same token, except for navigation, avoid site-wide links. This is something that we've known for years. If someone links to you externally, site-wide, in the side bar, that's ripe for Penguin-style links.

Again, these are best practices. There are always exceptions to the rules. But, generally, following these rules is going to help you out even if you have to break them sometimes.

Addendum: In many cases, footer links and site-wides are perfectly acceptable. The three reasons I recommend folks avoid them for link building purposes are:

We often associate external site-wide and footer links with Penguin-style actions. Not always, but it's something we look for.
Optimized, site-wide anchor text may trigger over-optimization filters.
The value of a sidebar or footer link is often considerably less valuable than a truly editorial link found in the main body text.

Keep doing link building!

On the "do" side of things, one thing that I want to emphasize is do link building. Don't give up just because Google is imposing these rules and penalizing people. We still need the people who are actively out there building links. They still have a huge opportunity to win. So don't give up on this as a part of your practice.

Focus on distribution

One thing I would emphasize doing is shifting from actively building links to more of a focus on distribution, because the more eyeballs that are on your content, the more natural links you're going to earn.

That's something we do here at Moz; we have a huge emphasis on social distribution, distribution through our partners. We just want to get the eyeballs on the content because that's the end goal anyway. There is a huge correlation between getting eyeballs on good content and link building. It's one of the best kinds of link building you can do. It's just getting your content out there on the right eyeballs.

Do some outreach

Along those same lines, outreach is still okay. Writing those emails, finding those influencers. Our friends at BuzzStream just wrote a really excellent guide on how to do outreach. Really worth a read. The idea is, along with distribution, you want to get the right eyeballs on your content so that they have those opportunities to build those natural links that you don't control the anchor text, where it's not scalable. It's a real human being putting a real link in their content and endorsing you.

Link value = traffic quality

One thing to always keep in mind that when we're looking at links and how we judge them, the value of the link equals the quality of the traffic that it can drive you. Meaning that this is kind of how Google judges links. It's not necessarily the quantity of the traffic that the link can drive you, but the quality. If you run a mechanic shop and you want good leads from those links, you would want other mechanic shops or auto part stores to link to you. A link from an SEO blog probably doesn't have a lot of value because it's not very relevant.

When you build links, one of the golden rules is look at the quality of the traffic that it's going to drive you. That's going to help you a lot in those relevancy signals that Google is looking at.

Embrace the nofollow

Finally, in this new age of link building, we need to start embracing the nofollow and not be as scared of it as we have been, because those links that we are considering no following probably weren't helping you that much anyway, and so embracing them sort of cuts those signals off that Google doesn't want those to pass PageRank. They don't want them to pass anchor text. But keep in mind that even no followed links, Google still looks at those. We have evidence that Google uses nofollowed links for crawling and discovery purposes. There is some evidence that Google may use nofollowed links for signals other than that. Not every link has to pass page rank or anchor text to be valuable.

One final thought that I want to leave with, to keep in mind, when you practice these good do's, these good link building practices, you start to take your marketing to a higher level. At its best, good link building is indistinguishable from good marketing. When you're doing link building right, you don't even need the links because you're doing good marketing. You're pushing your content out there, you're talking to those influencers, you're getting traffic to your site, and those just happen to be the signals that Google wants to reward.

Let's do that. Let's win the link building game. Happy Friday everybody. Thank you.

Video transcription by Speechpad.com

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vineri, 4 aprilie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Watch: Five Minutes with the President

The Rules of Link Building - Whiteboard Friday

The Rules of Link Building - Whiteboard Friday

Video transcription

Beware links you control

Be cautious with links that scale

Don't ask for anchor text

Don't link externally in the footer

Avoid site-wide links

Keep doing link building!

Focus on distribution

Do some outreach

Link value = traffic quality

Embrace the nofollow

Pagini

Persoane interesate

Arhivă blog

vineri, 4 aprilie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Watch: Five Minutes with the President

The Rules of Link Building - Whiteboard Friday

The Rules of Link Building - Whiteboard Friday

Video transcription

Beware links you control

Be cautious with links that scale

Don't ask for anchor text

Don't link externally in the footer

Avoid site-wide links

Keep doing link building!

Focus on distribution

Do some outreach

Link value = traffic quality

Embrace the nofollow

Pagini

Persoane interesate

Arhivă blog

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