The health of the U.S. employment picture, despite the strong rebound in June, remains a work in progress and is still not inspiring much confidence.
Despite the gain of 287,000 positions last month, questions remain over the jobs market. Numbers that don't show up in the Labor Department's closely watched monthly nonfarm payrolls report undercut the strength that the headline number suggests:
- Personal income tax receipts are off 11.3 percent over the past year.
- Corporate income tax receipts have tumbled 16 percent.
- Federal excise taxes are down 0.8 percent.
- State sales tax collections are up just 2.5 percent, around the lowest levels in three years.
- Federal withholding tax receipts fell 17 percent in June.
- Job openings are falling.
- Wage growth by one measure actually is negative.
Those numbers, compiled by economist David Rosenberg at wealth management firm Gluskin Sheff and experts, point not to a sector nearing full employment but rather one that remains vulnerable to the disinflation trend that is tugging on the broader economy. The result from an investing perspective is a Federal Reserve that will continue to be on hold when it comes to interest rates.
"We were told by all the pundits and media types about how great the payroll number was in June," Rosenberg said in a note, adding that "the veracity of that report is now called into question."
Rosenberg formerly was with Merrill Lynch, where he was known as one of Wall Street's most prominent bears. He moved to Gluskin Sheff in 2009 and turned bullish on the economy in early 2011. Lately, though, his comments have taken on a more pessimistic tone.