Artem Voloskovets
The U.S. job market keeps proving the pessimists wrong. While economists have been forecasting a slowdown for months, payroll-based tax data tells a different story—one of continued economic strength. FICA Withholding data still informs of a healthy labor demand." The numbers back him up. FICA tax collections rose more than 5% year-over-year, signaling that wages and employment are holding firm as we head into late 2025.
What the Data Shows
In a recent post, Seth Golden summed it up: "I still do not have a problem with the labor market. FICA withholdings—payroll taxes that fund Social Security and Medicare—act as a real-time snapshot of labor demand. Since they're directly tied to paychecks, they reveal whether employers are still paying workers at healthy levels. The latest figures paint an encouraging picture:
- Current 4-week total: $245.1 billion (Sept 29 – Oct 26, 2025)
- Prior-year 4-week total: $235.7 billion
- Year-over-year growth: +5.63%
- Trend: After a brief spring dip, payroll totals stabilized between $240–$260 billion and rebounded to $245 billion in October
- Growth rate: Consistently above 5% since early 2024, with no major signs of deterioration
The chart shows two key lines: the blue line tracks total FICA collections over rolling 4-week periods, while the red line measures year-over-year growth smoothed over 14 weeks. Both indicate steady momentum—employers are maintaining robust payroll levels, and wage activity isn't slowing down.
What It Means
Strong FICA receipts tell us about demand—how much companies are paying in wages—but they don't capture supply, meaning how many people are available to work. So while jobs and paychecks are plentiful, labor participation constraints might still be limiting who can fill those roles.
For the broader economy, this data matters in three big ways: it supports consumer spending through Q4, reduces recession risk (since withholdings typically drop before downturns), and gives the Federal Reserve room to keep interest rates elevated without worrying about a labor market collapse.
Bottom line? The U.S. job market remains one of the economy's strongest supports—not a weak spot.
Artem Voloskovets
