Will the Unemployment Rate rise in 2012?

As mentioned yesterday the there was a decrease in the Individual Tax Receipts for December as compared to a year ago.  Since 1998 when this has happened there was a spike upward in the Unemployment Rate the following year (points A to B) except in 2003 when it decreased slightly.  This it will be interesting to see if the Unemployment Rate will begin to reverse back to the upside in the months ahead.

Individual Income Tax Receipts drop in December

There was a drop in Individual Income Tax Receipts in December  as shown in the table below which shows the December Receipts going back to 1998.  If more people are finding jobs this didn't show up in the Individual Tax Receipt data which could mean many of the jobs being created are low paying jobs. 

Long Term "C" Fund Performance

The chart below shows the return of the S&P Composite since 1790 by decade.   Keep in mind the "C" Fund tracks the S&P 500 and since World War II we have seen three decades in which it has gained 150% or more.   Furthermore from 1990-1999 it gained an astounding 345% which is way above the long term decade average of 60%.  Meanwhile there has only been 5 decades in which the S&P has had a negative gain with the last one from 2000 through 2009 as it lost 15.5%.  On the positive side there has never been a period in which the S&P has had back to back losing decades as all have been followed by a positive return (highlighted by purple) for the next decade.  

Eliminate the Department of Commerce

A proposal has been announced to get ride of the Commerce Department by merging its components into different Departments.  This is supposed to save 3 Billion dollars over 10 years.  Considering the US already has a 15.2 Trillion in debt which will exceed 16 Trillion by the end the year a savings of 3 Billion over 10 years doesn't accomplish much in the bigger picture.     

0.5% Pay Raise for 2013?

Well if it goes through how much will it cost the Government.  In 2011 Federal Employees made $178,495,000,000 based on the Department of Treasury Report.  0.5% of that number = 892,475,000 or just under a Billion dollars.  Considering the US Debt is now nearing 15.2 Trillion and rising nearly 100 Billion each month another Billion isn't going to matter much. 

US Population versus Labor Participation Rate

The chart below is a graph of the US Population (blue line) from the 1950's overlaid with the Civilian Labor Participation Rate (red line).  Notice there has been a huge divergence since the late 1990's as the population has continued to grow while the Civilian Participation Rate has dropped by 4%.   Thus the US hasn't been creating enough new jobs to keep up with the pace of population growth.  If this trend continues that is going to lead to major problems in the future.

Debt Limit Update

Today we are only about 10.5 Billion away from reaching the Debt Limit.  It will have to be raised probably within a week or so.