Some Good News on Jobs: Tax Withholding Improving
Here is some excellent news on the jobs picture, courtesy of economists at Deutsche Bank.
After collapsing last year, individual returns-tax withholding seems to be turning a corner. Tax withholding is a excellent jobs indicator, because you have to have a job to get your taxes withheld.
Withholding sank with the recession?s onset and collapsed after the collapse of Lehman Brothers in 2008. But it seems to be turning a corner.
Here?s Joseph LaVorgna?s take: ?The tax data, which are reported daily by the US Reserves, are particularly valuable to us because they are not theme to revision. Over the past 3-4 months, the plunge in tax receipts has reversed sharply. While still down in year-on-year terms (-2.5%), the lengthening recovery in tax receipts strongly supports our view that net clear hiring is very near?probably not in the February figures (due to weather), but increasingly likely when the March jobs data are reported on April 2.?