https://fred.stlouisfed.org/series/FYFSD
Vertical blue lines indicate the beginning of recessions. Horizontal line is 0:
All smoke and mirrors
GDP ex-Deficit, never once went positive in this cycle...
The primary data point that the perennial bulls on Wall Street claim as evidence for an improving economy is the monthly jobs number. The Non-farm Payroll Report claimed that 255,000 jobs were added in July on a seasonally adjusted bases.
And according to the Bureau of Labor Statistics (BLS), a total of 1.66 million additional people have been employed thus far in fiscal 2016, making this the one bright spot in the economy.
With 1.66 million additional paychecks flooding the economy, one would assume the U.S. Treasury was flush with new tax receipts, which would assist in reducing the budget deficit.
However, according to the Treasury Department, the deficit came in at $112.8 billion in July, the highest since February's $192.6 billion. For the first ten months of the fiscal year, which ends Oct. 1, the budget deficit was $513.7 billion, up from $465.5 billion a year earlier.
A closer look at tax receipts over the past few years reveals that the growing number of employed has not had the effect on cash flows to the Treasury that you would expect.
The true employment condition, as well as the quality of those jobs, can be found in the tax receipt story, which is more comprehensive than the BLS's estimate. But it's not just payroll taxes that have declined; corporate tax receipts have fallen 12.8 percent year-to-date, while individual taxes are down 0.4 percent.
