The labour market has remained in flux since the summer began, particularly as summer auto plant shutdowns get postponed.
That’s made it difficult to get a proper gauge of the labour force.
If you’re not sure how to interpret the choppy initial claims data, there’s another indicator you can look to: Withheld Income & Employment Taxes. It also happens to be Deutsche Bank’s Joe LaVorgna’s favourite chart.
The reason? The federal government is always collecting payroll taxes.
Lee Adler of The Wall Street Examiner pointed us to this today.
For July, the four week moving average is showing a six per cent gain compared to the year ago period. Adler estimates that could mean a nonfarm payrolls jump of 290,000 jobs in the July report due out next week.