Central Perk

vineri, 1 mai 2015

Mish's Global Economic Trend Analysis

Weekend Diversion - Golf Trick Shots
ISM Disappoints, Led by Decline in Employment
Construction Spending "Once Again Defies Expectations" Much Weaker Than Expected; Four Reasons Economists Perplexed
Investigating the GDP Deflator: Wildly Differing Results Depending on Your Choice

Posted: 01 May 2015 07:04 PM PDT

It is amazing how good people can get at things. I would be hard pressed to even think about setting up some of these shots.

Even if you are not a golfer you may appreciate this video.

Link if video does not play: Bryan Brothers Golf Trick Shots.

I like to golf. Breaking 90 is an excellent game for me.

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

ISM Disappoints, Led by Decline in Employment

Posted: 01 May 2015 01:03 PM PDT

In addition to construction estimates missing by a mile today, ISM also disappointed, albeit not by much.

The Bloomberg Consensus estimate for ISM was 52.0 but the report was a slightly weaker 51.5. It's the details that are interesting.

There's a new unwanted wrinkle in the ISM report and that's weakness in employment, holding down the headline index to 51.5 in April, unchanged from March. Employment has been holding strong in other reports -- but not in the ISM report where the index is down nearly 2 points to a sub-50 level of 48.3 to indicate month-to-month contraction. This is the first time this reading is in contraction since May 2013 and it's the lowest reading since all the way back in September 2009.

Other indications, however, are positive. New orders actually rose in the month, up 1.7 points to 53.5, and export orders are above 50 for the first time this year, at 51.5 for a 4.0 point gain. Production, at 56.0, is especially strong as are import orders at 54.0 for a 1.5 point gain. Prices, as in other reports, remain in contraction, little changed at 40.5.

And there's solid breadth in the report with 15 of 18 industries showing composite growth in the month with strength in the auto industry specifically cited. This report is mixed though the decline in employment won't be raising expectations for next week's employment report for April.

Note on Diffusion Indices

I commented on employment in Richmond Fed Manufacturing Index Negative Second Month.

It's important to note that a single firm hiring one person will counterbalance another firm firing 50. It's entirely possible employment is not as strong as it looks (not that 7 is a particularly strong number in the first place).

Some of these subcomponents are mostly noise. The overall trend of all the reports in general is not noise. The baseline for zero growth in the ISM is 50, for the regional Fed reports it is 0.

ISM Details

Let's investigate all the details of today's report straight from the Institute for Supply Management Manufacturing ISM® Report On Business® released this morning.

Index	Apr	Mar	PP Change	Direction	Rate of Change	Trend in Months
PMI®	51.5	5.1.5	0	Growing	Same	28
New Orders	53.5	51.8	1.7	Growing	Faster	29
Production	56.0	53.8	2.2	Growing	Faster	32
Employment	48.3	50	-1.7	Contracting	From Unchanged	19
Supplier Deliveries	50.1	50.5	-0.4	Slowing	Slower	23
Inventories	49.5	51.5	-2.0	Contracting	From Growing	1
Customers' Inventories	44.0	45.5	-1.5	Too Low	Faster	5
Prices	40.5	39.0	1.5	Decreasing	Slower	6
Backlog of Orders	49.5	49.5	0	Contracting	Same	2
Exports	51.5	47.5	4.0	Growing	From Contracting	1
Imports	54.0	52.6	1.5	Growing	Faster	27

All in all the report was about as expected. The details conflict with Richmond Fed and Dallas Fed. The former above. For the latter see 6th Straight Negative New Orders Reading for Dallas Fed Manufacturing Survey.

As with the Richmond Fed, the Dallas Fed reported a slight increase in employment. Many of the individual numbers are likely noise.

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

Construction Spending "Once Again Defies Expectations" Much Weaker Than Expected; Four Reasons Economists Perplexed

Posted: 01 May 2015 10:58 AM PDT

Economists have been overly optimistic on the majority of economic reports for going on six months.

Today the Bloomberg Consensus estimate for construction spending was for a 0.4% gain. The actual result was a decline of 0.6%.

Construction spending once again defied expectations. March construction spending dropped 0.6 percent against expectations of an increase of 0.4 percent. On the year, construction spending was up 2.0 percent, down from February's annual increase of 2.7 percent. Both residential and public building declined. While weather can still be blamed for some of the decline, a basic weakness in the building sector was apparent.

Private residential spending dropped 1.6 percent on the month with both single family and multi-family homes declined. In addition, residential construction excluding new homes, which captures home remodeling, also declined after gains in the previous two months. Nonresidential private construction provided a ray of sunshine -- it advanced 1.0 percent on gains in the office, manufacturing, and health care sectors.

Public construction was down for a third straight month to its lowest level since February 2014. State and local government spending, the much larger portion of public construction, dropped in both February and March while Federal Government construction retreated after an 8.6 percent surge in the previous month.

Construction Spending

Construction Spending Percent Change From Year Ago

Four Key Reasons Economists are Perplexed

Weakness is "transitory" as the Fed explained on Wednesday. For discussion, please see Fed Cites Weather, "Transitory" Factors in FOMC Statement; No Hat Tricks; What About Consumer Sentiment?
Clearly the economy could use more Walmarts and McDonald's as there is not yet one on every corner. Forget about the fact that wages are going up and that will damper earnings and reduce the desire to open marginal stores. See Employment Compensation Costs (Wages and Benefits) Jump in First Quarter.
Millennials working multiple part-time jobs will soon buy a new home thanks to rise in hourly wage to $12.
We certainly need to build more public schools as retiring boomers will be going back to 8th grade en masse.

Those key points undoubtedly explain why economists are so perplexed with all this weakness.

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

Investigating the GDP Deflator: Wildly Differing Results Depending on Your Choice

Posted: 01 May 2015 12:46 AM PDT

As noted in Real Q1 GDP 0.2% vs. Consensus 1.0%; Disaster in the Details I got the first quarter GDP forecast details correct.

However, a bit of self-assessment with differing GDP deflators shows my prediction of close to zero growth could easily have looked rather silly.

I asked Doug Short at Advisor Perspectives what the GDP would have looked like using various deflators:

GDP (Implicit GDP Deflator)
PCE (Personal Consumption Expenditures)
CPI (Consumer Price Index)
Shadowstats (Williams' Alternate CPI)

Charts are shown below.

Both Doug and I consider Shadowstats absurd, but we include it because many follow the number. For a recent critique of the measure please see Deconstructing and Debunking Shadowstats.

clock on any chart for sharper image

GDP Implicit Deflator (Official GDP)

GDP with PCE as Deflator

GDP with CPI as Deflator

GDP with Shadowstats CPI as Deflator

Results

GDP (Implicit GDP Deflator): 0.2%
PCE (Personal Consumption Expenditures): 2.2%
CPI (Consumer Price Index): 3.3%
Shadostats (Williams' Alternate CPI): -1.2%

Defending on your price deflator, GDP was between -1.2% and +3.3%. If you toss out Shadowstats, then the range is 0.2% to 3.3%.

That's still a damn wide range. People accuse the BEA all the time of manipulating the deflator to make things look good, but if they easily could have done that this month for far better results.

Over time, GDP is highest with the PCE and GDP implicit deflators. At least the BEA is consistent.

Mean GDP

GDP (Implicit GDP Deflator): 3.26%
PCE (Personal Consumption Expenditures): 3.32%
CPI (Consumer Price Index): 2.93%
Shadostats (Williams' Alternate CPI): 0.79%

Next quarter, because of rising energy prices, deflating GDP by the CPI will likely yield worse results than the GDP deflator. Some people will criticize the BEA because of it, while remaining silent about this quarter.

As it stands, rising energy prices and the strong dollar will place downward pressure on second quarter GDP no matter which deflator one uses.

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

Why the Links You've Built Aren't Helping Your Page Rank Higher - Whiteboard Friday - Moz Blog

Why the Links You've Built Aren't Helping Your Page Rank Higher - Whiteboard Friday

Posted on: Friday 01 May 2015 — 02:17

Posted by randfish

Link building can be incredibly effective, but sometimes a lot of effort can go into earning links with absolutely no improvement in rankings. Why? In today's Whiteboard Friday, Rand shows us four things we should look at in these cases, help us hone our link building skills and make the process more effective.

For reference, here's a still of this week's whiteboard. Click on it to open a high resolution image in a new tab!

Video transcription

Howdy, Moz fans, and welcome to another edition of Whiteboard Friday. This week we're chatting about why link building sometimes fails.

So I've got an example here. I'm going to do a search for artificial sweeteners. Let's say I'm working for these guys, ScienceMag.org. Well, this is actually in position 10. I put it in position 3 here, but I see that I'm position 10. I think to myself, "Man, if I could get higher up on this page, that would be excellent. I've already produced the content. It's on my domain. Like, Google seems to have indexed it fine. It's performing well enough to perform on page one, granted at the bottom of page one, for this competitive query. Now I want to move my rankings up."

So a lot of SEOs, naturally and historically, for a long time have thought, "I need to build more links to that page. If I can get more links pointing to this page, I can move up the rankings." Granted, there are some other ways to do that too, and we've discussed those in previous Whiteboard Fridays. But links are one of the big ones that people use.

I think one of the challenges that we encounter is sometimes we invest that effort. We go through the process of that outreach campaign, talking to bloggers and other news sites and looking at where our link sources are coming from and trying to get some more of those. It just doesn't seem to do anything. The link building appears to fail. It's like, man, I've got all these nice links and no new results. I didn't move up at all. I am basically staying where I am, or maybe I'm even falling down. Why is that? Why does link building sometimes work so well and so clearly and obviously, and sometimes it seems to do nothing at all?

What are some possible reasons link acquisition efforts may not be effective?

Oftentimes if you get a fresh set of eyes on it, an outside SEO perspective, they can do this audit, and they'll walk through a lot of this stuff and help you realize, "Oh yeah, that's probably why." These are things that you might need to change strategically or tactically as you approach this problem. But you can do this yourself as well by looking at why a link building campaign, why a link building effort, for a particular page, might not be working.

1) Not the right links

First one, it's not the right links. Not the right links, I mean a wide range of things, even broader than what I've listed here. But a lot of times that could mean low domain diversity. Yeah, you're getting new links, but they're coming from all the same places that you always get links from. Google, potentially, maybe views that as not particularly worthy of moving you up the rankings, especially around competitive queries.

It might be trustworthiness of source. So maybe they're saying "Yeah, you got some links, but they're not from particularly trustworthy places." Tied into that maybe we don't think or we're sure that they're not editorial. Maybe we think they're paid, or we think they're promotional in some way rather than being truly editorially given by this independent resource.

They might not come from a site or from a page that has the authority that's necessary to move you up. Again, particularly for competitive queries, sometimes low-value links are just that. They're not going to move the needle, especially not like they used to three, four, five or six years ago, where really just a large quantity of links, even from diverse domains, even if they were crappy links on crappy pages on relatively crappy or unknown websites would move the needle, not so much anymore. Google is seeing a lot more about these things.

Where else does the source link to? Is that source pointing to other stuff that is potentially looking manipulative to Google and so they discounted the outgoing links from that particular domain or those sites or those pages on those sites?

They might look at the relevance and say, "Hey, you know what? Yeah, you got linked to by some technology press articles. That doesn't really have anything to do with artificial sweeteners, this topic, this realm, or this region." So you're not getting the same result. Now we've shown that off-topic links can oftentimes move the rankings, but in particular areas and in health, in fact, may be one of those Google might be more topically sensitive to where the links are coming from than other places.

Location on page. So I've got a page here and maybe all of my links are coming from a bunch of different domains, but it's always in the right sidebar and it's always in this little feed section. So Google's saying, "Hey, that's not really an editorial endorsement. That's just them showing all the links that come through your particular blog feed or a subscription that they've got to your content or whatever it is promotionally pushing out. So we're not going to count it that way." Same thing a lot of times with footer links. Doesn't work quite as well. If you're being honest with yourself, you really want those in content links. Generally speaking, those tend to perform the best.

Or uniqueness. So they might look and they might say, "Yeah, you've got a ton of links from people who are republishing your same article and then just linking back to it. That doesn't feel to us like an editorial endorsement, and so we're just going to treat those copies as if those links didn't exist at all." But the links themselves may not actually be the problem. I think this can be a really important topic if you're doing link acquisition auditing, because sometimes people get too focused on, "Oh, it must be something about the links that we're getting." That's not always the case actually.

2) Not the right content

Sometimes it's not the right content. So that could mean things like it's temporally focused versus evergreen. So for different kinds of queries, Google interprets the intent of the searchers to be different. So it could be that when they see a search like "artificial sweeteners," they say, "Yeah, it's great that you wrote this piece about this recent research that came out. But you know what, we're actually thinking that searchers are going to want in the top few results something that's evergreen, that contains all the broad information that a searcher might need around this particular topic."

That speaks to it might not answer the searchers questions. You might think, "Well, I'm answering a great question here." The problem is, yeah you're answering one. Searchers may have many questions that they're asking around a topic, and Google is looking for something comprehensive, something that doesn't mean a searcher clicks your result and then says, "Well, that was interesting, but I need more from a different result." They're looking for the one true result, the one true answer that tells them, "Hey, this person is very happy with these types of results."

It could be poor user experience causing people to bounce back. That could be speed things, UI things, layout things, browser support things, multi-device support things. It might not use language formatting or text that people or engines can interpret as on the topic. Perhaps this is way over people's heads, far too scientifically focused, most searchers can't understand the language, or the other way around. It's a highly scientific search query and a very advanced search query and your language is way dumbed down. Google isn't interpreting that as on-topic. All the Hummingbird and topic modeling kind of things that they have say this isn't for them.

Or it might not match expectations of searchers. This is distinct and different from searchers' questions. So searchers' questions is, "I want to know how artificial sweeteners might affect me." Expectations might be, "I expect to learn this kind of information. I expect to find out these things." For example, if you go down a rabbit hole of artificial sweeteners will make your skin shiny, they're like, "Well, that doesn't meet with my expectation. I don't think that's right." Even if you have some data around that, that's not what they were expecting to find. They might bounce back. Engines might not interpret you as on-topic, etc. So lots of content kinds of things.

3) Not the right domain

Then there are also domain issues. You might not have the right domain. Your domain might not be associated with the topic or content that Google and searchers are expecting. So they see Mayo Clinic, they see MedicineNet, and they go, "ScienceMag? Do they do health information? I don't think they do. I'm not sure if that's an appropriate one." It might be perceived, even if you aren't, as spammy or manipulative by Google, more probably than by searchers. Or searchers just won't click your brand for that content. This is a very frustrating one, because we have seen a ton of times when search behavior is biased by the brand itself, by what's in this green text here, the domain name or the brand name that Google might show there. That's very frustrating, but it means that you need to build brand affinity between that topic, that keyword, and what's in searchers' heads.

4) Accessibility or technical issues

Then finally, there could be some accessibility or technical issues. Usually when that's the case, you will notice pretty easily because the page will have an error. It won't show the content properly. The cache will be an issue. That's a rare one, but you might want to check for it as well.

But hopefully, using this kind of an audit system, you can figure out why a link building campaign, a link building effort isn't working to move the needle on your rankings.

With that, we will see you again next week for another edition of Whiteboard Friday. Take care.

Video transcription by Speechpad.com

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

You are subscribed to the newsletter of Moz Blog sent from 1100 Second Avenue, Seattle, WA 98101 United States To stop receiving those e-mails, you can unsubscribe now.	Newsletter powered by FeedPress
FeedPress is a service edited by Beta&Cie, www.betacie.com

Seth's Blog : Discovery fatigue

Discovery fatigue

When Napster first hit the scene, people listened to as many different songs as they could. It was a feast of music discovery, fueled by access and curiosity.

Now, the typical Spotify user listens to music inside a smaller comfort zone.

When blogs were fresh and new, we subscribed to them by the hundreds, exploring, learning and seeking more. Over time, many people stopped following the outbound links.

When Twitter was new, just about anything seemed worthy of a retweet. Not so much for many people today. And podcasts are already starting to fill people up, making us feel like we don't have the time to listen to more.

We come up with all sorts of excuses about our fatigue, most of them have to do with the fact that there's nothing good on, nothing new happening, or we're just too busy. I don't think those hold water...

I think there are actually three reasons:

First, once you're busy with what you've got, it diminishes the desire to get more.

Second, discovery is exhausting. Putting on a new pair of glasses, seeing the world or hearing the world or understanding the world in a new way is a lot more work than merely cruising through a typical day.

And third, infinity is daunting. A birdwatcher might be inspired to keep seeking out new birds, because she knows she's almost got them all. But the infinity of choice that the connection economy brings with it is enough to push some people to artificially limit all that input.

I think it's way too early to announce to ourselves that we've read the internet and we're done.