THE CORRELATION BETWEEN JOBS REPORT, GDP AND WITHHOLDING TAX

This is from a very interesting article in Zerohedge which correlates the Jobs Report, GDP and Withholding Tax. I have added my own input based on the charts.

In the chart above we can see that the employment continues to hold steady but the taxes withheld are falling. The Fed has time and again been jawboning about the excellent growth in jobs. If the jobs are so awesome why are the withholding taxes falling? The reason is because high and good paying jobs have been lost and are replaced by low paying minimum and part time wage jobs.

On top of that, the recent Jobs Report has shown that the number of hours worked have actually fallen from the month prior.

These can have far reaching effects such as:

1) Lower tax receipt means more government debt
2) More low paying jobs means lower consumer consumption. So is it any surprise that retailers are see falling revenues? Not only that, recent report on motor vehicle sales have also entered into negative territory. Ford too announced that sales have reached a plateau

However, if we correlate the Taxes Wthheld with GDP, the chart seems to make more sense.

Falling GDP = Falling Tax Receipt

So all the talks about the awesome jobs remain just that: Talk. Underlying all the "awesome goodness" is a far more disturbing trend.