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The granddaddy of monthly economic reports is the federal reading on the employment situation. To call this a single report is deceptive. It actually has a bunch of moving parts that, on their own or as a group, can move stock and bond markets.
It's easy to think of the report in four parts. The first is non-farm payrolls, which tracks the month-over-month change in the number of jobs in the U.S. that don't involve milking cows or picking lettuce. Then comes the unemployment rate, which is the percentage of unemployed people as it relates to the total workforce.
The third component is the average hourly earnings change, which tracks how much more or less money U.S. workers are making. Finally, there's the average work week, which counts the number of hours non-farmers work.
Like most data reports, the unemployment one has its flaws. For one thing, it tracks non-farm payrolls, which means that a lot of folks who work off the land -- or, more to the point, are not currently working off the land -- are excluded. Also, if you¿re a consultant or small-business owner (a big part of the current economy), you¿re not counted. On the flip side, you can be double-counted if you hold down two jobs. That's one of the reasons why it's common to see non-farm payrolls drop (suggesting higher unemployment) but the unemployment rate shrinking (suggesting higher employment).
The impact of the Employment Situation report often depends on the mood of the markets. Take the wage component. If stock and bond traders are worried about inflation, an unexpected rise in hourly earnings suggests wage inflation and, ergo, can scare people. But, that same spike could be welcome if traders are more worried about a slowdown in consumer spending. Higher earnings mean more spending power.
Look for the employment report on the first Friday of every month at 8:30 a.m. EST.
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Wednesday, March 26, 2008
Six Reasons You Shouldn't Count On Rebate Check Before It's Cut
Marshall Loeb
MarketWatch
NEW YORK -- Most Americans will soon receive rebate checks from the IRS worth anywhere between $300 to $1,200 or more, and many businesses have already launched marketing campaigns hoping to lure those potential customers.
Yet, many folks will not be eligible for a check at all and could end up in a bind if they've already hit the mall and put extra charges on their credit cards, counting on the rebate cash.
The global tax firm of Grant Thornton says if you belong to any of the following six categories of taxpayers, you should think twice before charging a purchase with plans to pay it off with that "free" government money. You may not be eligible for a rebate -- or at least not for a full or timely one -- if:
You owe the tax man money. The IRS has acknowledged that it will deduct from all rebate checks any federal tax debt. The agency will also withhold on behalf of all 50 states, and even Puerto Rico and American Samoa, any money owed in state or territory taxes. If you owe back taxes to the IRS or any state government, you could see your rebate reduced or gone altogether. You make too much money. The rebate payments will begin to phase out for individuals with gross incomes above $75,000, and for married couples filing jointly with incomes over $150,000. If your adjusted gross income is above those levels, calculate your rebate carefully before going on a spending spree. Payments to high-income taxpayers will be reduced by 5% of all income above the phase-out thresholds. You don't make enough money. If you have less than $3,000 in qualifying income, don't expect a rebate. Only those with $3,000 or more of income will be eligible. However, you will be able to count income typically exempt from taxation, like Social Security or veteran's benefits, to reach that minimum. You don't file a tax return. If you don't file a tax return, you won't receive a rebate. Many people with low incomes are not required to file a return, but will need to in order to receive a rebate. If you have over $3,000 in qualifying income, file a return even if you don't have to. You're just unlucky. The IRS's recently released rebate payment schedule is based on the last two digits of return filer's Social Security number. However, the IRS warns that a small percentage of tax returns will require additional time to process. For these returns, stimulus payments will not be made according to schedule. Taxpayers who put purchases on their credit cards in anticipation of a quick rebate check may be forced to pay unexpected interest if their return processing is held up. You don't have a valid Social Security Number. Some taxpayers without Social Security numbers file tax returns using an IRS-generated Individual Taxpayer Identification Number. These people will not be eligible for a rebate. If married and filing jointly, each spouse must have a valid SSN to receive the rebate.
Copyright © 2008 MarketWatch, Inc.
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