Tim Mazanec's  Instablog

Huge increase in the Total Individual withholding income taxes from the April 2013 Treasury report that came out Friday, up 14.5% y/y.

(click to enlarge)

Basically a surge in the Total Individual taxes on a y/y basis. If you want to get picky the monthly individual taxes paid figure barely rose on a y/y basis as that was up just over 3%. That is something to bare watching but the 2012 levels in May and June were low and appear to be easy beats to continue this pattern of growth.

This report is for your information only and does not constitute investment advice or an offer to buy or sell securities.

Wasn't it just a few days ago that the BLS released the NFP and disappointment regarding the jobs report was widespread. So much so that over the last few days people have been ignoring the Fed talk that they may need to shorten the QEs because of that report.

First: Ignore Fed talk at your own peril.

Second: As I wrote about over the w/end the jobs report wasn't all that poor, it was more reflection of the ineffective way that the BLS uses seasonal adjustments, especially when Easter comes early.

This leads us to the March Treasury report that was just released this afternoon.

See the chart:

(click to enlarge)

At the very end of the chart you will see an uptick in the Withholding taxes paid by Individuals on a y/y basis. The uptick is small but important.

You will also notice that last month it ticked lower which may have been an indication of what the NFP was to show.

The data can also be broken down by:

March 2013: Individual Withholding taxes +6.25% y/y

March 2012: Individual Withholding taxes +6.11% y/y

Slight improvement, but in Feb it fell to +5.1% y/y thus a needed comeback to keep the upward trend.

When looking at the aggregate figures on a rolling 3/mo basis:

March 2013 +5.17% y/y

March 2012 +3.6% y/y

A big improvement here.

Conclusion:

Although the participation rate and readily jobs available is at extremely disappointing levels the amount of total income is holding up and still growing at a moderate pace. More importantly it grew in March on both a monthly and a yearly basis.

Looking ahead I'm guessing that the NFP will bounce back for the month of April. The real trend rate is about +140k, at this point I'll be looking for +175k'ish.

They won't move the Jackson Hole speeches to the springtime this year but if they did then I would hypothetically expect some speeches on how aggressive monetary policy reaction saved the day. Whether or not the Fed believes in Term Limits, not just for Congressman, but for excessive monetary accommodation is to be seen. The speeches will now hold added importance over the next few weeks.

This report is for your information only and does not constitute investment advice or an offer to buy or sell securities.

Yesterday's 88k NFP figure was so horrid that it deserves a 2nd look, so here we go:

From the BLS Establishment survey.

Headlines:

Feb. now at +268k which is "Economy On"!

Mar. initially at +88k which is "Hit the Brakes" or "'Stopppppppp"!

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From the Top:

Feb. Mining and Logging: +5k

Mar. Mining and Logging: +1k

No impact from QEEE

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Feb. Construction: +49k, wasn't the Northeast under snow in Feb? Bad seasonals from the BLS here.

Mar. Construction: +18, close to the real trend w/ QEEE

Impact from QEEE, Significant, maybe even 50% or more for this industry

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Feb. Manufacturing: +19k

Mar. Manufacturing: -3k. Seasonals gone bad again.

Impact from QEEE, Near Zero, Mfg. gained +40k last March!

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Feb. Wholesale trade: +4.7k

Mar. Wholesale trade: -1k

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Feb Retail trade: +14.6k

Mar Retail trade: -24.1k. HOW OBVIOUS IS IT THAT THE BLS HAS NO IDEA HOW TO USE SEASONALS!!!!!! OMG

Early holidays this year, late holidays in Spring of 2012. Look for a big bounce back in April this year.

Impact from QEEE on holidays, yeah right, Zero

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Feb Transport: -1.7k

Mar Transport: -2.8k

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Feb. Information: +19k

Mar. Information: +5k

Impact from QEEE: Banks are not lending so start-ups are not happening and more kids are living with their parents. Maybe we should be paying more attention to how the Fed is now a better regulator than their FOMC activities.

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Feb. Finance: +8k

Mar. Finance: -2k

Still reeling after Lehman and Bear.

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Feb. Biz Services: +80k

Mar. Biz Services: +51k, was +46k this January.

Impact from QEEE: How about a thank you to US resiliency given what is occurring in Europe, the loss of double-digit growth in China and the inflationary impact of higher commodity prices.

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Feb. Education and Health: +31k

Mar. Education and Health: +44k. Health is where the jobs are at thanks to the Supreme Court.

Impact from QEEE: None. From what I hear premiums are about to skyrocket and that is with ZIRP!

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Feb. Leisure: +26k

Mar. Leisure: +17k, Boomers are retiring and if you don't want to be a nurse then this is your next best bet.

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Feb. Other: -2k

Mar. Other: -9k

Impact from QEEE: Quiz question here.

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Feb. Government +14k, No chance of sustainability

Mar. Government -7k, the real trend

Also, no impact from ZIRP or QEEE

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3 take-aways:

1) QEEE is not helping. Jobs are being created in Education and Healthcare. This has more to do with ObamaCare than ZIRP. Leisure is the next sustainable trend and if anything ZIRP is hurting the incremental spending that the Boomers could be doing.

2) The BLS has a hard time with seasonals. The spring holidays came early this year. They were late last year. Also they don't account for the weather. Geez, weather is part of every elevator conversation so why not include it in your models.

3) The jobs report from February was skewed higher. The jobs report in March was skewed lower.

How? Go back to the Government jobs, the +14k from Feb. is not sustainable. Sequestration. Plus this has been the trend over the last few years. The Retail sales figure is wrong as I've mentioned. The Construction jobs figure, it makes you wonder if the BLS is double checking their results before they publish them. +49k in February, yeah right.

Somewhere in the middle of the +268k and +88k would be closer to the real trend it appears. My guess is that we are closer to a trend of +140k job creation than a +200k rate. This will keep the participation rate dropping and the unemployment rate lower than discussed levels.

In the end it looks as if we are still in a low growth environment with few jobs being created outside of health and leisure.

This report is for your information only and does not constitute investment advice or an offer to buy or sell securities.