US Daily Cash Deficit 3/4/2014

The US Daily Cash Deficit for Tuesday 3/4/2014 was $7.3B, adding to Monday 3/3’s $11.2B and pushing the March 2014 cash deficit to $18B through 4 days.

2014-03-04 USDD

First…I have taken the liberty…as usual to sync up 2014 and 2013 on days of the week. So at this point, we are comparing 2014 3/1 through Tuesday 3/4 to 2014’s 3/1- Tuesday 3/5. This leaves 2013 with an extra business day…. Friday 3/1. Of course, the extra day gives 2013 a head start in both revenues, and costs. 2014 will pick up the business day on Monday 3/31.

Next…timing. March 2014 had about $35B of payments pulled forward…going out February 28 since 3/1 was a weekend. This has happened for a few months in a row now, but will not happen at the end of March, so we will be back in sync after this month. however…all else equal, March 2014 is going to be $35B lower in cost YOY….the offset was back in Jan, so YOY, we are back in sync.

To the charts….it’s really too early to know much….revenue is down due to one less business day. Unless refunds continue to surge like we saw in February, I would expect 2014 to continue to make gains and end up well ahead of 2013.

Outlays are currently down $42B…$35B due to the timing discussed earlier and let’s just assume the difference is the extra day. Assuming outlays will be more or less flat….I don’t expect a lot of movement here until the end of the month when 2014 gets that extra business day back.

As it stands….I would peg the March 2014 cash deficit at $15B thanks to strong revenues, timing, and more or less flat outlays. Refunds are the big wildcard in my mind….they could easily add a +/-20B of volatility.


**Just an update…I haven’t updated it in a while, but I took a look at my forecast accuracy…comparing the projection I typically try to make early in the month to the actual by month end. Going back to December, I had forecasted a $51B surplus…actual was $54B. In January, I forecasted a $25B deficit…the actual was $24B. And then…last month, I forecasted $224B….and sure enough…we ended up at $224B.

Now…I have to admit….the level of accuracy surprised me, and I have to assume that it’s more or less a fluke. If you look closer, there were plenty of misses in each of the ~60 revenue and outlay categories that make up my model…..but they more or less netted out…leaving my overall forecast pretty close to actuals.

I’ll reiterate….I do not expect this trend to continue….there are just too many moving pieces with far too much volatility. And…let’s put this in context….predicting a monthly deficit a month out is probably about the same as predicting the weather the day after tomorrow….odds are it’s going to look a lot like today. Over the long term…I would expect a sustainable accuracy to average +/- $10B. per month…. So…with that all down on record…. it’s probably a safe bet this month’s forecast will be demolished 🙂

US Daily Cash Deficit February 2014

The US Daily Cash Deficit for Friday 2/28/2014 was $40.0B bringing the February 2014 Cash Deficit for the full month to $224B vs $229B last year.

2014-02-28 USDD

It was an interesting month. Outlays were flat…up 1%. We still see declining outlays nearly across the board…except for SS, Medicare and Medicaid….where gains have…at least for this month washed out the reductions elsewhere. Due to timing, I don’t expect this to continue into March, but stay tuned for the rest of the year. Sequestration is just about a year old now, so those YOY reductions are unlikely to impress for much longer.

Revenue was even more interesting. Revenues stayed strong with withheld taxes ending up at +8%. Taxes not withheld were down 11%…but the amount was immaterial at -$652M…not sure that means anything for April or not. Deposits from the Federal Reserve more than doubled from $3.8B to $8.9B….so we have that money printing thing going for us. Offsetting this was tax refunds up $14B YOY at $128B compared to $114B last year. I don’t know if it is just timing or a bonafide 12% surge…we’ll have to wait until the end of April before we really know. And despite this…revenue(net of refunds) still ended up going from $95B last year to $104B, good for a 9% gain. Numerically I suppose that’s not quite as impressive as January’s ~10% climb from $289B to $317B, but a gain is a gain… we’ll take it.

Put it all together, and we have another strong month in the books with revenue clocking in just under +10% and outlays more or less flat. If we keep up this pace we could very well shave another $200B+ off the deficit this year getting us into the $400-$500B range. I’m skeptical….but I’ve been wrong before.