“It’s the Economy, Stupid”
Today’s title pays tribute to James Carville, one of the more colorful political strategists in recent memory. His comment, which was never meant to go public, was designed to keep the focus of a young governor from Arkansas on the key issue of the day. In Pennsylvania we are in the thick of heated presidential and senatorial races, therefore I wanted to share some facts and figures on the economy that may help you make an informed voting decision. No politics, just the facts.
Total Employment today stands at 144,747 million people working an average of 34.4 hours per week. The Total Employed number is the highest figure in the last ten years, while the hours worked figure represents a decline since January, 2016 of 0.2 hours/week. Average hourly wages have risen every month this year and stand at $25.79. A related figure, unemployment stands at 5% having bottomed at 4.7% in May, 2016.
Inflation as measured by the Consumer Price Index (CPI) is averaging around 1.1% in 2016. This figure was 0.7% in 2015 and 2014. Industrial production is flat after suffering a decline in 2015. Capacity Utilization stands at 75.4%, down from 76.7% in 2015. Interestingly, auto sales may reach 17.5 million this year, a rate that demonstrates the consumer is alive and well and finally replacing their old 12 year old cars (average age of fleet). Gas prices as measured by a barrel of West Texas Intermediate crude oil (WTI, for short) were $45 as of September, 2016, about the same as last year. In 2014, WTI averaged $93.30 per barrel. If you want to know why inflation is low, look no further.
Switching gears, according to 2014 IRS statistics, 16,158 corporations (all larger than $250 million in assets) paid 73.4% of total corporate taxes. Other businesses filed 4,257,909 returns as S Corps and 3,611,255 returns as partnerships.
As for individual taxes, there were 148,840,642 returns filed for a gross amount collected of $1,759,740,000,000. Median Adjusted Gross Income (AGI) was $38,171. If you earned more than $133,445, you were in the top 10% of AGI. For the top 1%, the AGI cutoff was $465,626. California had the highest number of returns with AGI of $1 million or more (65,845 returns) and Vermont had the fewest (530 returns). I will refrain from making any political references on these last two figures.
Estate taxes amounted to less than $18 billion, a small percentage of overall collections.
112 million individual filers received refunds. The average individual refund in 2014 amounted to $2854. 93.6% of returns were e-filed, which speeds up your refund in case you didn’t know it.
In the non-profit arena, 372,947 organizations filed form 990 or 990-PF’s, and collectively control $3.9 trillion of assets.
Last but not least, the IRS claims to have assisted 61,340,034 taxpayers via phone, written correspondence, or walk-ins to their offices. That’s a lot of time spent on hold, I would bet.
Finally, let me encourage you to get out and vote on November 8th. It is both a right and privilege in the world’s greatest democracy.
Ralph McDevitt
Sources: IRS - Tax Stats At A Glance (2014); Bureau of Labor Statistics – U.S. Economic Statistics Monthly Data (10/19/2016) and Payroll Report (Sept. 2016)
Views expressed are not necessarily those of Raymond James & Associates and are subject to change without notice. Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision. Past performance is not indicative of future results. There is no assurance these trends will continue or that forecasts mentioned will occur.
