US DAILY DEFICIT

The US Daily Cash Deficit for Thursday 4/10/2014 was $3.6B bringing the April 2014 cash deficit to $74B through 10 days.

I have decided to “unsync” 2014 and 2013 and go back to a straight calendar day comparison. I typically sync up on days of week because a lot of the cash inflows and outflows are driven by day of week…for example SS payments go out the 2nd, 3rd, and 4th Wednesday of the month(as well as the 3rd of the month). But April is a bit different. Those patterns still exist, but the dominant event of the month is tax day, April 15th, which will bring with it a surge of revenues. As such, proximity to 4/15 will be a large driver, and rather than complicate the issue by adjusting for day of week, from here on out, the charts will be unadjusted. So the charts above compare all years…10 days of April…regardless of day of week.

So…looking at April…2013 and 2014 are pretty much in sync. The forecast for a $180B surplus I made earlier in the month is dependent on a 13% YOY ($56B) increase in revenues. It’s not time to panic….most of that gain…if it happens will likely be seen after 4/15…but it is a bit curious that so far…nothing.

The US Daily Cash Deficit for Wednesday 4/9/2014 was $12.1B bringing the April 2014 deficit through 9 days to $70B.

No signs of an impending revenue surge yet….we are still pretty much in line with last year after adjusting for business days. It’s kind of hard to believe that we will go from a $70B deficit today to potentially a ~$180B surplus in just a few weeks, but that’s what the tarot cards say…

The US Daily Cash Surplus for Monday 4/7/2014 was $5.6B following a $0.5B surplus Friday 4/5/2014, and bringing the April 2014 deficit through 7 days to $56B. Through one week, nothing really stands out….this year looks a lot like last year so far. Revenues and outlays appear low on the chart, but that’s mostly due to the extra business day for 2013… Things won’t really get started until 4/15 next Tuesday.

The US Daily Cash Deficit for Thursday 4/3/2014 was $29.3B bringing the April Deficit through 3 days to $62B, which is quite common given that a lot of monthly outlays are heavily front loaded.

As is standard, I have taken the liberty of aligning 2013 and 2014 on day of week rather than day. It’s not perfect, but many of the inflows are driven by day of week, giving us a better YOY comparison throughout the month. So at this point, we are comparing April 2014 through Thursday the 3rd with April 2013 through Thursday the 4th. Since 2013 has an extra business day, this early in the month, it is not a big surprise that revenues are down by about $10B, as are outlays.

We’ll just leave it at that for now. It’s too early in the month to really see anything, and the real fireworks don’t kick of until the 15th anyway….so stay tuned.

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….