May 2014

The US Daily Cash Deficit for Thursday 5/29/2014 was $1.0B bringing the May 2014 deficit to $110B with one day remaining in the month.

As expected, Revenues finally overtake 2013 and now stand at +0.3% with a $552M edge. Last days of the month are generally hard to predict….I would expect May 2014 to retain its narrow lead and build on it a bit, but you never know.

Looking only at withheld taxes, January-March 2014 was running at +8.04% over 2013, which itself was up 8.32% over 2012. With one day remaining in May, April-May 2014 is running at +1.53%….compared to 2013’s 13.23% gain in the same period over 2012. So what we have is starting to look like a real slowdown in revenue growth from the 10%+ we saw from  1/2013 to 3/2014. This is actually more or less what I expected to happen in January…after all, it makes sense that revenues grow more or less in line with GDP/population/labor force….that is 1-3% or so (absent changes in tax rates like 2013). It will take a few more months of data to confirm if this is the case, but if it is, the deficit should more or less stabilize for the time being at around $500B or so before slowly heading back up as moderate growth in outlays outpaces the low single digit revenue gains over the next few years. Of course…if there is a recession or if interest rates rise…all bets are off….it could go south in a heartbeat.

The US Daily Cash Deficit for Wednesday 5/28/2014 was $15.1B as the last round of May SS payments went out, more or less syncing up 2013 and 2014 outlays….though May 2014 will have one less business day when it’s all said and done. The May 2014 deficit through 28 days stands at $109B with 2 remaining business days in the month.

Revenue takes a step back and now stands at -1.5B YOY…however, there appears to be a $2.5B timing issue with excise taxes that should resolve itself 5/29…and push May 2014 past May 2013 for the first time this month. As for the deficit…May 2013 ran a $39B deficit over its last 2 days, so absent a material improvement…a $140B+ deficit seems likely.

The US Daily Cash Surplus for Tuesday 5/27/2014 was $3.5B bringing the May 2014 Deficit through 27 days to $94B with 3 business days remaining in the month.

Revenues gain just $100M YOY and are still negative for the year. Outlays are down about $25B, but should cut that in half with the 5/28 SS payments of about $13B. Absent any surprises, it is looking like my $133B deficit forecast may be a little light….$140B+ is starting to look likely, with the main variable being the size of the 5/30 deficit driven by payments due 6/1 being paid early due to the weekend. Last year 5/31 posted a $37B deficit under similar circumstances

The US Daily Cash Deficit for Friday 5/23/2014 was $3.0B bringing the May 2014 Deficit to $97B through 23 days.

We see small YOY revenue gains…bringing 2014 to just -$454M…essentially even with four remaining business days. As we know…anything can happen, but it is starting to look like revenue growth is going to be under 5% for the second month in a row. If we see a few more months like this…it might safe to say the 15 month revenue surge of 1/2013 to 3/2014 is over….might…

The US Daily Cash Deficit for Thursday 5/22/2014 was 4.3B bringing the May 2014 deficit through 22 days to $94B with 5 business days remaining in the month.

Revenues make up a little ground as we caught up on those customs/excise taxes discussed yesterday with a solid $2B YOY gain…we are now just $700M under last year, so I would expect us to end the month up, but it’s not looking like it will be by much.