Get Ready for a Weak February Treasury Statement

Here’s how the key info from the February 29 Daily Treasury Statement came in:

The increase in withholdings collected is the good news, as I believe it shows that more people are working more hours, which indicates underlying economic strength. Yes, there was one more business day in 2008, but from a collections standpoint, it’s more important that February 2007 and 2008 each had four Mondays.

But the drop in non-withhelds and corporate taxes collected could be another signal of a longer-term problem, namely, as I said last month, that the entrepreneurial engine is stuck on idle.

As to the refunds, $98.2 billion has gone to individuals, and $8.1 billion to businesses, vs. $77.4 bil and $5.7 bil a year ago. It’s hard to tell how much of the individual refund increase happened because those who are entitled to refunds filed earlier to get them faster, or whether it’s because the average refund for each filer has been a lot higher. This USA Today article indicates that it’s a bit of both, though (because USAT’s reporting covers the first two months and not just February) I can’t get from its stats to February’s 27% increase ($98.2/$77.4).

So it looks like net receipts for February will be no more than $100 billion, and could come in a lot lower.

If there’s no letup in federal spending, which has averaged $235 billion per month so far this year, a one-month deficit of $150 billion, and conceivably even higher, isn’t out of the question (last February’s deficit was “only” $120 billion). Old Media will probably pounce on this as evidence of chronic economic decay.

We’ll know the final numbers next Wednesday at 2 p.m., when the Monthly Treasury Statement comes out.