US Daily Cash Deficit 6/8/2015

The US Daily Cash Surplus for Monday 6/8/2015 was $6.7B bringing the June 2015 Deficit through 8 days to $54B.

2015-06-08 USDD

No time for commentary today…hoping to do a recap by week end.

 

May 2015 Cash Deficit

The US Daily Cash Surplus for Friday 5/29/2015 was $2.4B bringing the May 2015 Cash Deficit to $104B for the month.

2015-05-29 USDD

 

Revenues:

Revenues were up nearly $10B good for a 4.5% YOY improvement. May 2015 had one less business day, so adding that in and we would have been between 6-7%…not as impressive as April’s +13.5%, but good enough.

Outlays:

Outlays were down $31B, but all of that is related to timing as in 2014 $30-40B of payments due 6/1 went out in May since 6/1 fell on a weekend. May’s gain will be June’s pain, expect it to start with a big hole

Deficit: On increased revenues and decreased outlays, the deficit was down $40B vs May 2014. Pulling out timing events, I’d guess we were more or less flat

YTD: We are now 5 months in, and revenue is up 9%. Outlays show flat, but adjusted for timing I’d put them at +3%. That leaves us with the deficit itself with a $103B YOY improvement.

June Outlook: My initial May deficit forecast was $100B, not far off from the $104B actual. June is a quarter close month, which means it should have fairly strong tax revenues. Last June posted a $78B surplus, but due to the timing discussed above, I am putting my initial June 2015 forecast at a $50B surplus. In this number is 8% YOY baseline revenue increase based on what we saw in May, plus an extra business day in 2015 over 2014. Offsetting that, I expect Fannie/Freddie dividends to continue their plunge, maybe coming in at $2-3B vs $10B a year ago. Outlays will be up big….including a 3% baseline plus normalized timing picking up in June the outlays that went out in late May in 2014.

D-Day:  We ended the month of May with $199B of cash, down from $275B to end April. I’d guess they also burned through another $30B of “Extrordinary Measures” (EM), bringing the total to $130B since they started in March out of an estimated $350B at their disposal. Last month I estimated the cash available for deficit spending was at $525B…as of the end of May I would lower that to $199B cash+$220B EM, so $419B. This puts default day in mid February-2016…unless of course the debt limit is raised, which we all know it will be.

 

 

US Daily Cash Deficit 5/28/2015

The US Daily Cash Deficit for Thursday 5/28/2015 was $1.7B bringing the May 2015 deficit with one day remaining to $106B.

2015-05-28 USDD

Revenues are sitting at +4% and outlays at ~+2%. Not a great month by any stretch, but progress nonetheless. Friday will likely run a $5-10B deficit, still leaving us well under last May primarily due to favorable timing…last May ~$30B +of outlays due 6/1 were pulled into May….this should not repeat as June 1 is on a Monday this year. Next Up…June, which should run a solid surplus in the ~$50B range as quarterly tax payments should boost revenues by ~$140B over May. As always revenue will be key…anything over 5% is pretty good news.

US Daily Cash Deficit 5/21/2015

The US Daily Cash Deficit for Thursday 5/21/2015 was 5.1B bringing the May 2015 cash deficit through 21 days to $91B.

2015-05-21 USDD

Revenues are back up over 2014 running at +3.7%. Given that May 2015 is down a day, this is a respectable number, even if it’s only a $6B gain. Outlays are up 1% ($3B) giving us a 3B deficit improvement vs 2014 so far. My initial forecast was a $100B deficit for the month, but we appear to be headed a bit over that…say $105-115B. Month end timing is going to cloud the YOY, so right now is probably a clear snapshot of the May baseline….revenue up ~4%, outlays up 1%. Probably won’t make any headlines, but if slow and steady wins the race, this will go down as an ok month. For the year,revenue is at +9% and outlays are at 3.5%.

Just a flashback….the trailing 12 month cash deficit peaked in 9/2009 at $1.817T….as in Trillion. Since then, driven primarily by increased revenues and flat cost, we are closing in on 6 years of more or less uninterupted deficit improvement, probably ending up under $500B at the end of May. Yes…$500B is still a huge number, and yes there are demographic time bombs around the corner, and yes…there could be a recession any second now, but still….crossing the $500B threshhold is something I would have never predicted 3 years ago as I was preparing to launch this blog. My best guess back then was stabilization around $1T for a few years before zooming to infinity and beyond. So…where are is the deficit headed? Down to zero or back to $1T+?

I honestly don’t know, but pulling out a ruler and following this trend, we look to be on track to finish 2015 at about a $400B deficit per year rate. If we assume revenue grows at 7% from there, and outlays grow at 3%, our 2016 deficit is 272B, 2017 is $130B, and 2018 hits a $26B surplus. Is that my forecast?….nope….i don’t have one because my crystal ball is quite broken. The primary question would be….How do we grow revenues 7% when population growth + inflation is maybe 3%??? Hell if I know but that’s more or less what we’ve done for the last 5-6 years, so why not another 3-4… Don’t get me wrong….I’m definately not in the optimist boat here, but it’s getting hard to not to take a look in the rearview mirror and at least notice that things are a hell of a lot better than they were…just look at the bottom right chart above for annual deficit through 141 days. In mid May 2009 we were sitting on a $764B deficit….2015 is less than 1/4 of that at $176B.

**I do realize of course that by letting an optimistic thought out of my head, I’ve probably doomed us all to another great recession…sorry about that :(

 

US Daily Cash Deficit 5/15/2015

The US Daily Cash Deficit for Friday 5/15/2015 was $26.7B bringing the May 2015 Deficit to $86B halfway through the month.

2015-05-15 USDD

Revenue is down -$3B YOY, due to the one fewer business days, and either a timing event I don’t know about or a ~$5B one time event last year that flew under the radar, and did not repeat again this year. Outlays are up $2B, so we find the deficit up $5B.

We are a bit further behind on revenue than I thought we would be at this point, but nothing to worry about yet.  The rest of May should be fairly low key as we trend up from here. My initial $100B deficit forecast may prove to have been a little bit optimistic if revenues don’t shore up, but I don’t expect anything drastic in the second half of the month.