Federal tax receipts suggest that the GDI numbers, not the GDP numbers, are accurate. They also hint at a recession.
Tax receipts and total receipts come from the Bureau of Economic Analysis, which also produces the government’s GDP estimates.
Data is up to the first quarter of 2023 because fiscal data such as gross domestic income (GDI) is not available in the first quarter GDP estimate.
Tax receipts and total receipts since 2018
Total revenue has fallen three quarters in a row. Tax receipts have fallen for two quarters in a row.
Total receipts and tax receipts Percentage change compared to the previous quarter
When tax revenue and total revenue fall, the economy is usually in recession. There were false signals in 1985 and 2003. There have also been unconfirmed recessions due to falling receipts, so this is admittedly not the best of signals. But tax data and GDI data align.
Real GDP beats expectations, rises 2.4 percent in first estimate for Q2 2023
Almost everyone applauded the strong report, except it wasn’t quite strong. GDI did not confirm GDP. The GDI was negative for two consecutive quarters.
Non-farm payrolls and employment levels
Payrolls vs employment from May 2022
- Non-agricultural payrolls: +4,162,000
- Employment level: +2,695,000
- Full-time employment: +2,116,000
Of the 894,000 increase in employment in January, 810,000 were due to annual benchmark revisions. And the BLS doesn’t say which months were reviewed, just poof, there you go. Again, we cannot suggest with much confidence that these reports represent an accurate picture of jobs or employment.
Every month, economists and the mainstream media release strong employment reports. But the household survey (employment levels) does not match the non-farm payrolls (the establishment survey).
They measure two things. The establishment survey is a job count, while in the household survey you are either employed or not, regardless of how many jobs you have.
The gap between jobs and employment also lends credibility to GDP and not GDP. So does the index of total hours worked.
BLS jobs report falls well short of stellar ADP expectations
I comment on these discrepancies each month when the job surveys are released. For the latest report, see The BLThe S Jobs report is well below the stellar ADP expectation
Payroll tax data, income data and the household survey are synchronized. GDP is the odd man out.