Mish's Global Economic Trend Analysis

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Existing Home Sales Down 4.8%, Decline More Than Expected; "Still Healthy and Trending Higher" Says Bloomberg - Let's Investigate Posted: 21 Sep 2015 12:56 PM PDT Existing Home Sales Decline More Than Expected Existing home sales in August dipped 4.8% month-over-month to a seasonally adjusted rate of 5.31 million units. Although a decline of 1.7% was anticipated, the actual number was below any estimate in the Bloomberg Consensus Range of 5.4 to 5.6 million. Though slowing in August, existing home sales are still healthy and trending higher. Existing home sales came in at a lower-than-expected 5.31 million annual rate in August which is the lowest since April. July was revised down just slightly but is still an 8-year high at 5.58 million. At 6.2 percent, growth in year-on-year sales is the lowest since February. The year-on-year median price, up only 4.7 percent to $228,700, is the lowest since August 2014. The report cites no special reasons behind August's softness, but notes that it follows prior strength, in fact six months of strength. With the in dip sales, supply relative to sales is less tight, at 5.2 months from 4.9 months in the prior two months. But there's still a lack of homes on the market, evidenced by a comparison with the year-ago supply at 5.6 months. Details show high mid-single digit declines across regions except the Northeast where the August sales rate was unchanged. Year-on-year, data are very well balanced with high mid-single gains for all. Despite low mortgage rates and soft prices, the housing sector isn't exactly on fire. Watch for FHFA house prices on tomorrow's calendar, which are expected to rise, and also for new home sales on Thursday which are also expected to rise. Still Healthy? What caught my eye in the analysis was the statement by Bloomberg that sales were "still healthy and trending higher."  Let's investigate that claim two different ways. Existing Home Sales in Number of Units click on any chart for sharper image For several years prior to and shortly after the 2001 recession, existing home sales were trending at about 5.2 million units at a seasonally-adjusted annualized rate. During the bubble years, existing home sales rose as high as 7.26 million homes in September of 2005. In July of 2010, sales fell to 3.45 million units, less than half of the peak bubble rate. Home sales are now back to about where they were between January 1999 and August 2002. Existing Home Sales in Number of Units Population Adjusted In the above chart, I take the civilian noninstitutional population into consideration. The civilian noninstitutional population is defined as people 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (penal, mental facilities, homes for the aged), and who are not on active duty in the Armed Forces. On a population-adjusted basis, the number of units sold per thousands of people was pretty steady at about 25 units from 1999 to August 2002. It hit a bubble peak of 32 in September of 2005 and crashed to 14.5 in July of 2010. For August, the number is 21.15 per 1,000 people, a significant gap to years just prior to the housing bubble. Trending Higher or Chopping Around? In the second chart I was pretty generous to Bloomberg in reference to the idea that existing home sales are trending higher. There was certainly a clear trend between July 2010 and July 2013. Since then, existing home sales have mainly been chopping around sideways. It's often easy to play games with trend lines to support one's view.   Mike "Mish" Shedlock Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Millennials Surpass Boomers: Why are They Still in the Basement? Eight Reasons; Attitudes and Pendulums Posted: 21 Sep 2015 06:07 AM PDT Millennials Overtake Boomers According to Pew Research Millennials will overtake Baby Boomers this year. This year, the "Millennial" generation is projected to surpass the outsized Baby Boom generation as the nation's largest living generation, according to the population projections released by the U.S. Census Bureau last month. Millennials (whom we define as between ages 18 to 34 in 2015) are projected to number 75.3 million, surpassing the projected 74.9 million Boomers (ages 51 to 69). The Gen X population (ages 35 to 50 in 2015) is projected to outnumber the Boomers by 2028. Why are So Many Millennials Still in the Basement? Bloomberg has some interesting charts and commentary in its report Here's Evidence That Millennials Are Still Living With Their Parents. In 2015, 15.1 percent of 25 to 34 year olds were living with their parents, a fourth straight annual increase, according to an analysis of new Census Bureau data by the Population Reference Bureau in Washington. The proportion is the highest since at least 1960, according to demographer Mark Mather, associate vice president with PRB. The tough job market for young people since the recession ended in June 2009 is also contributing to a lower mobility rate. Adults under 30 are typically the most mobile part of an American workforce, constantly on the move since the 19th century. That mobility has been seen as a key advantage of the flexible U.S. labor market compared with places like Europe. The latest Census data show just 3.1 percent of Americans from 25 to 29 relocated in the last year between states, just half the share of 2002. While moves between counties in the same state — less likely to be for jobs — have increased some, they too remain below pre-recession levels, according to PRB's analysis. Goldman Sachs economists, who examined the phenomenon of "kids living in the basement" in an August report, found a few reasons to explain it. Millennials, the 82 million people born between 1981 and about 2000, have been plagued by chronic underemployment since the recession — consider the college grad working as coffee barista — and rising student debt is proving to be a lasting burden. "Above-average youth underemployment rates alone account for about one-third of the increase in the share of young people living with their parents, and lagged effects of the recession probably account for a bit more," Goldman's David Mericle and Karen Reichgott wrote. Goldman Sachs just touched on the reasons. I think we can do much better. Let's expand the list. Eight Reasons Millennials Living With Parents Student debt Soaring Tuition Costs Unaffordable home prices Shrinking real earnings Participation rate of those aged 25-34 Demographics of aging Changing attitudes towards debt Changing attitudes towards family formation Student Debt Problem number 1, student debt is well understood. But note that the trend towards living at home started rising sharply in 2000, well before the 2007 recession and well before the current student debt crisis. We must go well beyond student debt to explain the trend. Tuition The trend towards living at home took a sharp jump higher just as tuition costs, went through the roof. Chart from Doug Short's Thoughts on Student Debt. What else happened in the 2000-2002 time frame? The answer is home prices went through the roof. Real Home Prices The above from Doug Short at Advisor Perspectives. Home Prices vs. Owners' Equivalent Rent The above chart from my article Housing Prices, "Real" Interest Rates, and the "Real" CPI. Now let's look at real earnings, not just jobs. Here are some snips from my article Real Median Earnings for Men at 1971 Level, Women at 2001 Level Earnings of Men vs. Women - Fulltime Workers Earnings Progress The female-to-male earnings ratio is at an all-time high of 79 percent Real median earnings of male fulltime workers is at a 1971 level Real median earnings of female fulltime workers is at a 2001 level By the way, those "real earnings" numbers assume you believe the government's measure of inflation. Note that the CPI does not reflect home prices or property taxes, and is at best a crude, inefficient, measure of prices. Participation Rate Those aged 18-24 typically do not buy houses and more millennials than ever before are in school. But let's remove school from the equation by looking at the participation rate of those aged 25-34. Once again we see bad news starting in or around 2000, just as home prices soared. Aging Demographics Until this year, "boomers" were the largest group demographically speaking. Boomers are aging. Many are in poor health, cannot take care of themselves, and cannot afford or do not want to be placed in a nursing home. This need forces many millennials to move in with their parents, simply to take care of them.   Silver Lining? Goldman's David Mericle and Karen Reichgot see a "silver lining" based on the idea children will one day leave their parents' basements, and that household formation will prove to be a huge boost to a subpar housing recovery. I take the opposite view based on changing attitudes, real earnings, and a certain inevitability. The inevitability is death. As boomers die off many will simply choose to stay where they are living. This especially holds true where homes are not fully paid off. And there is no reason to believe the trend in real earnings is about to change. So how are the "young and not-so restless" supposed to suddenly get restless unless real earnings take a sharp rise higher? Finally, neither Bloomberg nor Goldman discussed points seven and eight regarding attitudes. Changing Attitudes The Fed has been perplexed as to why its policies have not worked.The explanation is pretty easy. I have been writing about it ever since the housing bust. Kids see their parents and grandparents arguing over debt and ability to pay bills. Many lost their houses to foreclosure. Divorce, suicides, and clinical depressions over the loss of jobs or homes are widespread. And the once widely-held notion that one's home is a retirement nest-egg has been smashed on the hard rocks of reality. Millennials (at least those hit hard in the crisis) don't want to be like their parents, chasing the suburban dream, ill-equipped to take on debt when they have poor-paying jobs and a mountain of student debt on top of it. Pendulums Attitudes are like pendulums in that they move from one extreme to the other before reversing. Unlike pendulums, attitudes take a very long time to go from one end to the other. It took multiple generations for people to fully forget the great depression. Many who were wiped out in the stock market crash of 1929 never got back in. In contrast, boomers had no recollection of the crash. Instead they have recollection of the Fed bailing them out time, after time, after time. Those 18-34 have no recollection of being bailed out of anything. They see the problems that debt caused their parents, and a significant number do not want any part of chasing the boomer's dreams. Eventually the boomers will die and the number of millennials living with their parents will start to reverse. Just don't expect an economic boom from it any time soon. Attitudes towards debt have changed. There is no economic nor demographic reason that suggests the attitude pendulum is close to a reversal. Mike "Mish" Shedlock Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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You Can Spend A Night In This Giant 60 Room Sand Castle Posted: 21 Sep 2015 02:56 PM PDT The Zand Hotel is a giant sand castle in the Netherlands constructed by event organizers for Global PowWow. The hotel took four weeks to build and has 60 rooms that are open for business.

Meet The Rock's Stand In Double Who's Also His Cousin Posted: 21 Sep 2015 02:19 PM PDT The Rock is one of the most popular actors in the world right now but he couldn't have done it without his cousin Tanoai Reed. Tanoai works as a double for The Rock in his feature films. Do you see the resemblance?

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A Picture of You: Results of the 2015 Moz Blog Reader Survey - Moz Blog

A Picture of You: Results of the 2015 Moz Blog Reader Survey

Posted by Trevor-Klein

The Moz Blog is built to help you all become better marketers. We couldn't possibly succeed in that goal if we didn't have a good sense for who you are and what you'd like to (and need to) see, so we did what anyone would do to get that sense: ask.

This summer, we released a survey to ask you all about yourselves, your work, and your thoughts about the Moz Blog. This is the second time we've done this in the last several years, which makes these results all the more exciting—now we have trending data.

The results from the survey are below, with a list of key takeaways at the end of the post (feel free to scroll for the tl;dr). We've included stats, where available, from the 2013 survey as well, giving the data a historical benchmark.

We'll use what we learned to keep making the Moz Blog more relevant, more actionable, and more valuable for you all, and we'd like to extend our sincerest thanks to the more than 750 of you who responded.

Let's get down to it!

What is your job title?

Back in 2013, as as we expanded our products to emphasize areas of marketing outside of just SEO, we all thought our community would expand along with them. When we released this survey in December of that year, more than six months after rebranding from SEOmoz and a few months after we rolled out our new suite of software, still very little had changed.

Now, nearly two years later, after countless blog posts about content marketing, local search marketing, social media, branding, and more, we're only just beginning to see a shift.

I'm normally not a huge fan of word clouds, but they're fairly effective in illustrating things like this. Here's a cloud made from all of your job titles in this year's survey:

And here's the cloud from the 2013 survey, nearly two years ago:

It's remarkable how similar the two are, but we can begin to see the change.

Our audience is clearly predominantly marketing managers with a heavy emphasis on SEO. The word SEO is smaller in this year's cloud, though, and "digital" and "content" are larger. It definitely looks as though we're seeing more content marketers among our audience, and the numbers back that up.

In a numerical breakdown of the words we see most often (and the total number of responses in each survey was nearly identical), "seo" drops from 233 to 194, and "content" jumps from 34 to 51. Here are the rest of the most common words seen, along with the number of times they occurred in each year's survey:

Word	2015 survey	2013 survey
seo	194	233
marketing	235	169
manager	137	154
specialist	84	55
director	61	52
analyst	38	44
online	35	43
consultant	24	42
strategist	44	37
content	51	34
ceo	15	31
search	21	30
marketer	19	26
owner	20	24
social	15	9
chief	3	3

What percentage of your day-to-day work involves SEO?

The idea that our audience is finally broadening is supported by another statistic: the amount of SEO that our readers do in their day-to-day work. Whereas the 2013 survey skewed a bit more toward the high end of the scale, there's a significant spike in responses between 0-10% this year. The median value reported dropped from 60% to 50%.

On a scale of 1-5, how advanced would you say your knowledge of SEO is?

The plot thickens, though, when we turn to actual SEO ability. We asked everyone to self-report their knowledge of SEO, on a scale from 1 ("I'm a beginner") to 5 ("I'm an industry expert"), and the similarity to the 2013 survey is staggering:

There are fewer people reporting themselves as industry experts, but not many. So, people have the same skill level, but SEO is less a part of their day-to-day work. To me, that implies their skill sets are growing, and the industry is simply demanding a broader gamut of work from them. They're becoming more and more T-shaped.

Do you work in-house, or at an agency/consultancy?

One note before we dive into this one: There should have been an additional option on the survey for independent freelancers. Without that option, we assume (since those folks do some of their own work and some work for clients) that most of them fell into the "both" category below, but we can't really be sure.

With that grain of salt in mind, there are clearly more in-house marketers than agency/consulting marketers in our audience:

At the same time, nearly half of our readers have some work for external clients. It's good to know that the set of skills unique to that type of work are relevant on our blog.

What are some of the biggest challenges you face in your work today?

As it was in 2013, this is my favorite question we asked. It was open-ended, and thus was such an easy question for respondents to skip (not many people usually want to type their own answers in a survey), but 621 people responded out of just over 750 total times the survey was taken. There were some easily visible recurring answers, and the top 20 are as follows:

Challenge	# of Mentions
Constant changes in the industry/technology	73
Lack of knowledge and unrealistic expectations of colleagues/clients/bosses	65
Convincing clients of value of the work	60
Lack of time	53
Content creation/curation	35
Link building	33
Team/resource constraints	33
Analytics	30
Proving ROI	28
Overwhelmed by too much content, too many tools	26
Budget constraints	23
Finding and promoting to the right audience	22
Communication/trust issues, politics	18
Rankings	17
CRO	14
Juggling different kinds of work/clients	14
Diversifying skill sets and proritizing channels	14
Complexity of work	14
Integration of siloed marketing teams	12
Reporting	12

Of note, half as many people noted content marketing as a great challenge this year as noted it in 2013. If that's any indication, we're getting better at it, or at least are better able to wrap our heads around it than we were before.

Above all, though, the top issues are largely the same: The industry is constantly changing, and it's incredibly difficult to find time to stay abreast of those changes. There's too much shoddy content to sift through (likely thanks to the rise of content marketing), and clients and bosses still largely don't understand the value in our work, as it's quite difficult to prove the ROI of what we do.

How often do you read posts on the Moz Blog?

We asked readers how often they read the Moz Blog (which has a new post published nearly every weekday), and there's definitely a difference from 2013:

In all likelihood, this is largely due to the broader gamut of topics we include in our editorial calendar these days. We now have content marketers in our audience who aren't always interested in advanced SEO, and technical SEO veterans who aren't interested in brand strategy. For that reason, more people are reading regularly, but fewer are reading every day. This also likely has something to do with the lack of time we noticed in the question above.

On which type(s) of devices do you prefer to read blog posts?

This was surprising in 2013, but the numbers were even more extreme this time around:

A whopping 71% of blog readers prefer to read posts on a desktop or laptop machine, up from 68% a couple of years ago. Just about all the numbers are the same here; it seems as if a group of folks who switched between laptops and tablets decided they'd rather stick to full machines.

Of note here is a theory we had last year that Moz Blog readers decided they preferred desktops because our blog wasn't mobile-friendly. We had, in effect, trained them to prefer reading on full screens, because it was just plain difficult to read on mobile devices. By the time this year's survey was sent out, though, the blog had been mobile-friendly for more than two months. There's always the chance that habits take more than two months to break, but if you ask me, that's evidence that our readers really do prefer to read posts on a laptop or desktop.

What percentage of the posts on the Moz Blog would you say are relevant to you and your work?

While there's not much change from the 2013 numbers, we're still quite happy to see that the majority of readers say that the majority of posts are relevant to their work. There's a slightly greater concentration of posts in the 11-40% range than there was before, which we can expect to go along with a broadening of post topics. Interesting to also see an increase in responses in the 91-100% range—I'd guess an increase in marketing generalists, and fewer folks with narrower sets of skills, leads to that change. (I'd love to hear any other theories in the comments!)

Do you feel the Moz Blog posts are generally too basic, too advanced, or about right?

One thing we regularly wonder is whether the posts we're publishing are too basic to actually be valuable, or if they sail right over the heads of our readers. As it turns out, it's pretty well balanced:

The inner circle in the donut chart above is data from 2013. The numbers from this year (the outer circle) are nearly identical, moving a few (statistically insignificant) responses from "Too basic" to "Just right."

We also asked readers who didn't say posts were "just right" to quantify the extreme to which they thought the posts were either too basic or too advanced:

This is interesting—people who see posts as too advanced feel more strongly about that response than the people who see posts as too basic. That implies we have some true beginners among our readers who would benefit from coverage of the basics in easy-to-digest formats.

In general, what do you think about the length of Moz Blog posts?

This is a question we didn't ask last time. We wanted to get a sense for whether readers had any strong feelings about the length of posts. Our suspicion was pretty well confirmed:

More than 1/5 of responses indicated our posts are too long, a much greater percentage than we'd like to see. This is really good feedback; we do tend to err on the comprehensive side, but could certainly put more effort into removing extraneous text from posts.

What, if anything, would you like to see different about the Moz Blog?

We also asked an open-ended question about whatever you all would like to see different about the Moz Blog. Reading through the responses was one of the most heartening things I've done in my time as the manager of the Moz Blog—a heartfelt thank-you to everyone who offered words of encouragement and ideas for how we can make this blog even better.

Here were some of the most common themes:

Request	# of responses
More step-by-step / how-to guides	37
More WBF / video-based content	27
More case studies	22
Too wordy/verbose; more to-the-point	18
Shorter posts	18
More posts	11
More Rand, Dr. Pete, Cyrus	11
More international content & translations	11
More accessible for beginners	9
More explicit takeaways for each post	8
More interactive elements	8
Better categorization / IA	7
More technical posts	7
More posts from respected influencers	6
More news / timely analysis	6

This was a telling question when we read through the responses in 2013, and not a lot has changed:

Which of the following topics would you like to learn more about?

Search engine trends, Mobile SEO, and CRO are all new categories we added this year. Other than that, the top three remain the same—advanced SEO, content marketing, and data analysis. Social media was bumped down a few spots, and branding was bumped down a few more spots. Design/UX was bumped up significantly, and one of the biggest gainers was basic SEO—something that, until recent years, we didn't see a lot of demand for on our blog.

More than anything, it's pretty clear that SEO and content marketing are still the hottest topics, and there's far more demand for advanced SEO than there is for basic SEO. That said, we're definitely seeing demand for a wide spectrum.

Which of the following types of posts would you most like to see on the Moz Blog?

We added a few options to this question this year to try and get a better sense for your preferences. Two of the strongest categories weren't chosen quite as often, causing a general flattening of the graph, but it's still quite easy to get a feel for what you all like to see by checking out the results:

A word we often use to describe great posts is "actionable." If readers can finish the post and immediately have a new tool or tactic at their disposal that they're excited to use, we've done our jobs well. It's easy to see that reflected in the above results. Making people think is good. Getting them to put their own work in new contexts is great. But the posts that really win are those that show instead of telling, offering readers a quick lesson that helps immediately improve their work.

Now we go to work.

This is a wealth of data that can help us continue to improve the Moz Blog, and the next step is to put it all into action. Here's a good start:

Primary takeaways

• The greatest challenges faced by our audience haven't changed much in two years. Keeping up with a constantly changing industry. Convincing other people (clients, bosses, etc.) that channels like SEO and content marketing -- while long-term investments with fuzzy ROI -- are worthwhile investments. You all are constantly battling to have work in the first place, let alone actually get that work done, and there isn't enough time to get all that done. Our job now is to take those challenges (and the rest that you all named above) and find industry experts who can help you through them.
• The traditional blog format, where all posts are published to a single channel to the same audience, is no longer cutting it. Our range of topics is broad enough and our audience diverse enough that we need to find better ways to deliver our content to readers, helping them filter out what they don't need and more quickly hone in on what they do.
• The vast (vast) majority of our readers still prefer to read blog posts on desktops and laptops, so while we're happy the Moz Blog is finally responsive, we won't shy away from developing features because they primarily benefit desktop/laptop users.
• We have a growing contingent of beginners in our audience. While the majority of readers are more experienced and advanced, we should focus on making all of our posts as accessible as possible, reducing unnecessary jargon and linking to additional resources. Nobody should feel like a post goes straight over their heads, or like they're not experienced enough to glean value from it.
• Two full years after the rebrand from SEOmoz, our audience is shifting ever so slightly toward a broader skill set than its SEO roots. It is continuing to become more T-shaped, as even the experts among us are finding less of their day-to-day work to do with SEO. Our posts (while never forgetting those roots) should continue to reflect that diversification.
• Through their self-identification as agency employees or consultants as well as their predominant challenge in convincing clients their work is worth time and money, it's clear that agency professionals with client-based work make up a large portion of our audience. We haven't posted much to specifically help this group, and will likely make more of an effort along those lines.
• There is a general call for shorter posts, but it's not simply shorter: It's more concise. More compendious. We'll work on continuing to hone our editorial rigor to ensure we're cutting verbose language and off-topic rambling. We certainly don't want to make you all read things you don't need to.
• With that concision in mind, we'll address the clear demand for more case studies and more actionable how-tos and step-by-step guides.

All of that, combined with your stated preferences for topics and styles, gives us a great place to start making improvements.

Thanks again to everyone who sent us their thoughts; we couldn't do what we do without you. =)

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Tires, coffee and people

The most important part of a race car is the tires. Good tires will always beat bad ones.

The most important part of a cup of coffee is the beans. The grinder, the machine, the barista pale in comparison to the quality of what you start with.

And the most important parts of an organization are the people you begin with. Not the systems or the policies or even the real estate. Great people make everything easier.

And yet...

And yet we spend money on 4 wheel drive instead of snow tires.

And yet we upgrade our coffee maker instead of buying from a local roaster (or roasting our own).

And mostly, we run classified ads to find the cheapest common denominator employee and spend all our time building systems to protect our customers from people who don't care...

       

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