The annual rate of change in withholding taxes has grown increasingly negative in inflation adjusted terms for more than a month. Following on the heels of a weak December, it is a clear sign that the US has entered recession. Other data confirms. As reported here previously, withholding tax collections accurately foreshadowed a negative surprise in the January nonfarm payrolls headline print. February looks much worse in the early going.
The latest report for Federal Revenues Investor Monthly subscribers can be found here.
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