Federal withheld income tax collections plunged nearly 15% from mid-March to mid-April signaling a record plunge in employment. Based on the employed payroll workforce of roughly 152 million in March and using a strict rule of percent changes in tax collections to the percent change in the number of jobs the collapse in tax collections would equate to a record loss of 23 million jobs in April.
Withheld income tax collections over the 5 weeks ending Saturday, April 18 captures the survey time frame between the March and April employment reports so it provides an early gauge of the potential change in the level of employment.
To be fair, there is a direct but loose connection between tax collections and jobs for the simple reason, not every job has the same wage, so the amount of paid taxes per job varies. Also, some people hold two or more jobs and generate the same amount of federal tax payments as a single higher paying job. There are roughly 8 million workers that hold multiple jobs, so reported job loss could exceed 23 million.
A drop of 23 million jobs might not come as a shock given the 22 million jobless claims filed over the past 4 weeks. But it would be a "Headline" that will stand alone in American history and it should since a loss of that magnitude would wipe out the job gains of the 2009 to 2019 economic recovery, the job gains of the 2001-2007 recovery, and even the last part of the job gains of the 1991-2001 growth cycle.
In other words, a decline of 23 million jobs would put April payroll employment at the same level last seen in early 1999---more than 20 years ago. Wiping out two decades of job gains in a single month is unprecedented, but , more importantly, it is a vivid picture of coronavirus economic devastation.