Every month we produce two proprietary indices, one that graphs monthly state withholding tax collections against budget officials' projected collections and one that graphs state sales tax collections against projections. The market works on shocks to expectations, and the correlation between shocks to tax collectors' expectations and national data points is impressive.

As graphed below, our Withholding Diffusion Index (share of states at or above expectation) has a .86 correlation with the monthly changes in national employment and our Sales Diffusion Index, weaker because of the time lag in sales tax collections, has a .62 correlation with the Advance Monthly Retail Sales print.

Annual nonfarm payroll growth & TLR withholding diffusion index

Annual retail sales growth & TLR sales tax diffusion index

Additionally, we are known for our meticulous dissection of official data, in which we point out technical anomalies glossed over in the mainstream press, and for highlighting market-moving events as they develop. We were first to write about the corporate profit squeeze (download the report: And Now a Structural Profit Warning ) to suggest that the Bureau of Economic Analysis would need to seriously revise down their initial NIPA calculations (one of the few revisions that was actually noticed by the markets), and are widely recognized as the best in the business on national employment trends.