This chart (click to enlarge ) shows the 12-mo. rolling sum of federal revenues: total revenues in blue, and individual income tax receipts in red. A very remarkable thing has occurred over the 12 months ending last October: individual income tax receipts have increased by almost 22%, far outstripping the 7% increase in total federal revenues over the same period.
If income tax receipts are booming, then it's a safe bet that incomes are booming as well. Although we have seen only modest jobs growth over the past year (130K per month on average, with a yearly gain in total jobs of only 1.2%), incomes are rising much faster. This helps explain why retail sales growth has been robust, and personal consumption expenditures have climbed almost 5% in the past year.
It's not that consumers are over-spending, it's that consumers are in much better financial shape than the broader economic statistics suggest. Incomes are rising much faster than jobs, a fact that has somehow remained under the radar and under-appreciated. This is a very healthy development, to say the least. I note, furthermore, that income tax receipts are very real and not likely to be overstated.