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Notes to myself, possibly of interest to others.
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Wednesday, June 29, 2011

Federal Withholding Tax Data: US Already in Recession?

Bill: This is not the most piercing analysis ever, but it's provocative.
Lee Adler today:

In the summer of last year things looked good comparatively speaking because the comparisons versus an extremely weak 2009 were easy. But then in August there was a stall...

Then in mid November the Fed floored the accelerator with QE2. That worked for a while, with the growth rate averaging 5-8% until Christmas...

Beginning in March, the theory seemed to be working as withholding tax collections surged versus last year around the same dates...it persisted until the middle of May.

Then things fell apart. The government was peeling off its stimulus programs, gas and food prices had skyrocketed, and suddenly on May 17 tax collections fell versus the same period last year. Since then, the difference between last year and this year has been near zero in real terms. That drop versus the strong gains in March and April [last year] suggests that the US may have entered recession a month ago.

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