Two charts worth noting today. One courtesy of John Williams via John Hussman showing the dramatic decline in the hard-to-fudge totals for Federal Withholding Tax deposits over the past six months. Whereas payroll earnings numbers have improved over the past year, they are heavily guesstimated based upon BLS assumptions which are usually revised in retrospect. Tax receipts on the other hand, are cash in hand and are typically a much more accurate reflection of reality. This chart suggest that official estimates of payroll and earnings have been overstated the past 6 months and are likely to be revised lower shortly. More evidence that the US economy is weakening faster than some official data suggests.
And the other (courtesy of Zerohedge) showing the ongoing contraction in the US M2 Money Velocity (shown in black–money moving through the economy) and the ominous spread which is now gaping beneath the current price level for the S&P 500 (purple line). This space is likely to close with a further decline in the price of stocks over the next few months.
Cory’s Chart Corner
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