US Daily Cash Surplus 4/15/2015

No surprises here….driven by $33B of corporate taxes and $23B of individual income taxes, Wednesday 4/15/2015 posted a $46.8B surplus, pushing April 2015 to a $16B surplus through 15 days.

2015-04-15 USDD-B

Now, for starters, we are not completely in sync, as is practice around here, we are synced on day of the week comparing 2015 through Wednesday 4/15 to 2014 through Wednesday 4/16/2014.  So 2014 has an extra day, and given the huge taxes flowing in Mid April….this gives it a big advantage…likely at least $20B. Because of this timing issue, our chart shows revenues more or less flat at -$2B. Don’t panic yet….there is a lot of month left, and these timing issues should start washing out by the end of next week. There is still a lot of uncertainty, but if I had to guess I’d say we are still on track for 5%-8% growth…. however…. there are some areas for concern to watch out for.

First off, corporate tax deposits are more or less done for the month, and are tied up with last year at $42B.   Corporate Taxes are only ~10% of total expected revenues for the month, but it’s going to make it that much harder to post a good growth %. Second, unwithheld tax deposits look a little light so far, but it could just be timing. They came in at $7B 4/15, and will likely build up to next Tuesday at $40B+, before sliding back under $1B by the end of the month.  This is a crucial category…last April it brought in $192B of revenue, 45% of the total. If we have a miss here, the month it going to look pretty crappy.  On the other hand, withheld taxes are looking good, and tax refunds  are down, but it’s really going to come down to unwithheld taxes over the next 5-6 days. As always…stay tuned.

US Daily Cash Deficit 4/13/2015

The US Daily Cash Surplus for Monday 4/13/2015 was $13.4B bringing the April 2015 deficit through 13 days to $53B.

2015-04-13 USDD

2015 Revenues appear to be taking a step back, but I would guess it’s likely timing with 2014 being one day closer to tax day (Monday 4/14/2014) than 2015. Tomorrow it will get a lot worse, and honestly it may be close to the end of the month before the dust settles enough we get a good read on the YOY.  That won’t stop me from trying, but you’ve been warned. For now, 13 days into April, we don’t see anything out of the ordinary. Pulling out timing, I’d put revenue at ~+5% and outlays up a few percent…but all that could change in a day. Last year, 4/15 alone pulled in $77B of revenue, so a hit or miss here could make  or break the month….

US Daily Cash Deficit 4/8/2015

The US Daily Cash Deficit for Wednesday 4/8/2015 was $11.3B bringing the April 2015 deficit through 8 days to $65B.

2015-04-08 USDD

2015 and 2014 are still roughly aligned…nothing so far to suggest a revenue surprise is on the way in either direction.

I have barely heard a peep on the debt limit issue over the last few weeks, but thought it was worth noting that through 24 days of “Extrordinary Measures” (EM), the apparent value of the “missing” debt is about $51B. I don’t know exactly how much cash they can generate in this fashion, but I’d guess ~350B total. The current cash balance is $44B, so add to that another $300B of EM, and $200B for the surplus we are likely to run over the remainder of the month, and we have nearly a $550B cushion remaining before Uncle Sam for real runs out of cash. Assuming current run rates….I think that gets us to next February…which is probably when this will get resolved .

US Daily Cash Deficit 4/3/2015

The US Daily Cash Deficit for Friday 4/3/2015 was $23.1B bringing the April 2015 deficit to $57B through 3 days.

2015-04-03 USDD

No surprises yet…Most months start off with a pretty big deficit since a lot of outlays go out between the 1st and 3rd, including the first round of Social Security on the 3rd at about $24B and a ~$20B Medicaid payment that typically goes out on the 1st.  As it standard practice, I am synchronizing 2015 and 2014 on days of the week, so our charts are comparing 4 days of April 2014(Tuesday 4/1/2014-Friday 4/4/2014) to 3 days of 2015 (Wednesday 4/1-Friday 4/3). This won’t help us as much as it usually does, as it is calendar 4/15 that triggers corporate and unwithheld taxes, but we’ll stick with it anyways because it should keep SS payments and withheld taxes more or less in sync. 2015 will get the extra day back at the end of the month… Thursday 4/30.

Despite the difference in days, revenues are all tied up and outlays are down just $4B. The deficit should trend up a bit over the next week, then on 4/15, a flood of revenues should start flowing in pushing us to Surplus by the end of next week, and somewhere between $100B-$200B by the end of the month. My guess is officially $155B surplus, but it all depends on revenues.

 

US Daily Cash Deficit March 2015

The United States Cash Deficit for March 2015 came in at $16B compared to March 2014 which came in at $25B using the same methodology. Do recall I had to adjust the math this month due to “Extraordinary Measures”(EM). This methodology attempts to isolate EM, but also ignores discounts and premiums on newly issued debt. Using our standard methodology, March 2014 had a $31B deficit, so $6B higher. Once EM is over…in 6-12 months (hopefully sooner) , I will be able to true up the true cash deficit over this time period, but for now, this will have to do.

2015-03-31 USDD

 

REVENUE:

Revenue started out as the big story of the month as we kicked off March with $35B of additional revenue from the FCC spectrum auction. Sure enough, March 2015 ended up with revenue $38B higher than 2014, but that’s not the whole story. Offsetting this windfall, GSE dividends (Fannie/Freddie) were down big from $17.6B last March to just $2.8B this March. This is the lowest I’ve observed, with December 2011 at $4.3B being the next lowest, and June 2013 the highest at $66.3B…one has to wonder….will this revenue source completely dry up, and maybe even go negative over the next year? Nah…. Other than that, we had bonafide revenue growth where it counts…withheld taxes (up 6.8%) and corporate taxes(up 12.9%) , giving us a solid baseline at ~+8% for the month, though the extra day certainly helped that a bit. For the year, this baseline is a bit under 5%…good, but not as good as years past.

Outlays:

Outlays were up a fairly big amount for the month at +11% and $29B. $6B of that was expected interest timing. The rest can be mainly attributed to our big 3…Medicare, Medicaid, and Social Security, up $14.5B between them, up 12%. The rest was scattered over multiple categories. This puts us at +4.5% for the year, and while granted our methodology is a little different than last month when we were pretty much flat, this is not a good development through 3 full months of 2015.

Deficit:

For the Year, the deficit stands at $263B…$10B under last year. That’s not impressive but it is improvement, so of course we’ll take it.

Refunds:

Refunds are a big part of February and March cash flows, and there was some thought that Obamacare would spoil tax refund season for those who had conveniently underestimated income to recieve bigger subsidies. That may be the case, but 2014/2015 individual refunds are just about tied with last year both YTD and for the month. 2015 YTD is at $198.8B…2014 was at $198.4B. Business tax refunds have nearly doubled from $12B to $21B on the year, but are still way under 2010’s $42B through 3 months.

Forecast:

March was not my best showing…I guess I let my optimism :) get the best of me forecasting a $5B surplus, but marginally lower revenues and higher outlays sunk me, leaving me with a $21B miss to follow February’s $1B miss. Oh well…my average is still around $10B. Moving forward, April is notoriously unpredictable. Last April, I missed by $55B….optimistically predicting a $180B surplus vs. an actual surplus of $125B. So…fully aware this may be a swing and a miss, I’m going to assume we get ~8% revenue growth in both withheld and not withheld taxes, while outlays are up ~3% overall. Pencil that out, and I’m down for a $155B surplus for the month of April.

Summary:

It was another good month, even if most of that was due to the spectrum auction. I know everyone is talking about popping bubbles and doom and gloom, but for the time being, government revenues continue to grow at a fairly steady pace. Granted, things can change quickly, but as of the end of March we are still pushing forward with 5+ years of fairly impressive revenue growth. When/If things go south, I should see it in real time (not saying this is a leading indicator…just saying we’ll see it).

Sit back and enjoy the show!!