Skip to comments.Federal Tax Data Is Signaling A Big Jump In Jobs
Posted on 07/27/2012 9:36:01 AM PDT by SeekAndFind
As of July 25, Federal withholding tax collections for the prior 10 business days were 3.2% greater than last year. The 10 day total is extremely volatile however, so for that reason I also look at the 4 week moving average. It is up by 6% year over year in nominal terms. This number must be adjusted for compensation inflation to derive a real rate of change.
This chart compares current withholding tax collections with last year on the same date. It shows this year running well ahead of last year in nominal terms. The gap has been widening all year from zero at the beginning of the year.
The April bulge was related to non compensation withholding such as mutual fund withholding for capital gains distributions.
The BLS jobs data is based on payrolls for the week including the 12th day of the month. During that week, the real year to year increase in withholding taxes was 1.5%. To estimate the July headline payrolls number, multiplying July 2011 non farm payrolls of 131.407 million x 101.5% = 133.378 million. That would be an increase of 290,000 jobs versus the June number.
With everyone talking about how weak the economy is, that would be a big positive surprise. Will the number actually come in that strong? Given the vagaries of the jobs surveys, including the fact that the rate of change in weekly average earnings could be substantially different from last months 2.2%, its doubtful. I suspect a beat of some magnitude. The data will be released Friday, August 3
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All it takes is ONE bang up month of job growth before Nov 6th and the entire media complex will pump it up to the sky to help Obama.
Temp Summer Jobs
Soooo..an increase of 290,000 jobs over June
Just gotta write it down to compare 8/3
The increase in jobs in due to all the campaign workers that the Obama campaign is hiring, just like during the census. They aren’t real jobs, just temporary work that probably doesn’t pay more than minimum wage.
Bet most of it is from the North Dakota and Texas Oil Patch.
This could be bad for King Romney. It’ll help King Obama.
Has there EVER been any doubt that the unemployment rate in the Oct/Sept timeframe would MAGICALLY drop below 8.0% no matter what it takes to fudge the numbers. Just simply eliminate a few million more from the workforce ane voila....
Taking a 10 nday read on data to guage and then propose a job increase possibilty of the magnitude they suggest is insane.
Any kind of big increase would be viewed as total BS just because every other indicator on the economy is headed straight down.
Has anyone seen the latest ADP Payroll numbers? Not sure when they are released but they are somewhat accurate. This withholding tax thing is totally new to me.
Statistical noise. How can you be the single greatest anti-business president in history, with policies that almost seem designed to crush jobs, and then pant anxiously for every subtle uptick in jobs numbers? Even if this is true, long term, Obama’s policies have and will kill job growth.
If true, Obama will deserve none of the credit. Moreover, we have every right to view with extreme skepticism any sudden improvement of the government’s employment statistics.
meanwhile a record number of people on food stamps does not signal a big jump in jobs.
“Big Jump in Jobs” that doesn’t even keep up with population growth and crap?
The increase in withholding isn’t due to more jobs... it’s due to people cashing in their capital gains in 2012 since it appears that the captital gains tax rate will go up SIGNIFICANTLY in 2013. At a minimum they will go up by the 3.8% Obamacare Tax... significantly more if the Bush Tax Cuts are allowed to expire.
When you cash in stock or other investments which have a capital gain, there is withholding taken out for Federal Income Tax. This is where the increase is coming from.
I thought the auto industry didnt take a 2 week shutdown this year compared to last year.
As with others, I expect the numbers to be manipulated to provide a boost to Obama starting in September. I hope the GOP has some knowledgable, sharp-eyed quants watching this data.
And reducing their tax-exempt contributions (401k etc.) because they’re desperate.
maybe people are just increasing their withhholding to get ready for taxmageddon
I know I did
Unemployment benefits are taxable.
I agree. Many companies and individuals are probably doing all they can to make money and declare income this year as much as possible. Businesses have also found ways to do more with fewer employees, increasing profits. But with taxmageddon looming, many companies will start laying off employees and shutting down some operations to re-assess their business models.
The big swoon is coming in the next few months.
I just read a report about a company that’s cancelling its expansion plans because of the new medical device tax.