Econintersect: Some analysts are finding a consistent story indicating a continuing pattern of slow but steady economic growth. That story comes from monitoring federal tax receipts and deposits which have been rising pretty much continuously for three years now. The rate of rise did flatten in 2011 but rose moderately through 2010 and 2012. Overall the rate of increase of tax receipts is less than for the four years 2004-2007, but that is consistent with the relatively slow growth rate for GDP in the more recent period.
Click on graph for larger image.
The steepening slope in early 2013 coincides with the increase by 2% for FICA. But that does not account for all of the increase, not even half. Lee Adler points out that the year-over-year increase in withholding tax revenues is mostly between 9% and 10% since the beginning of 2013. See graph below. In 2012 the year-over-year increase was ranged from 0% to 5% during the first quarter. And the 2013 rate of growth so far is double that of December 2012. Adler estimates that the increased withholding corresponds to a 2.4% real GDP gain for the first quarter.
Click on graph for larger image.
Sources:
- US Treasury Tax Receipts (Ed Yardeni, Dr. Ed’s Blog, 25 March 2013)
- Here’s The Real Time Evidence That The US Economy Is Growing at 2.4% Right Now! (Lee Adler, GEI Analysis, 27 March 2013)
