First…a look back at March. After actually nailing the February forecast…mostly by luck, I reverted to the mean in March with my $15B forecast missing the $25B actual by $10B. Still…that’s a forecast error I can live with, though as I have discussed before….you really shouldn’t be all that impressed. Forecasting a monthly deficit a month out is kind of like forecasting the evening weather based on what you see when you wake up….it’s probably going to be more of the same.
That said…..rather than looking at the April 1 deficit… of $36B…let’s take a crack at the full month forecast. April is probably one of the tougher months to forecast because revenues pour in mid month, and can be quite volatile. Last year, for example, April revenues surged 27% YOY…try forecasting that with any degree of accuracy. My forecasts are ground up…independently forecasting about 20 revenue streams and about 40 streams of outlays. However, at the end of the day, a few large streams dominate the forecast…get them about right and the rest falls into place. So…admitting up front that this is a bit wilder than normal guess….$180B Surplus. Last April had a $117B surplus…I am assuming we see about 13% YOY revenue growth, refunds continue to be down a bit, and outlays are flat…maybe even down a smidge.
The month will start off with a deficit, currently at $36B as mentioned above, but right around the 15th, corporate and individual tax revenues will start flooding in and remain elevated for the remainder of the month. Any material beat of this on the revenue side, and we could see a sub $300B deficit for the year….still large, but light years away from the $1.6T deficit we posted in 2009….