Daily Deficit

First a look back at May, where I initially forecasted a $133B deficit…$11B short of the actual at $144B….So not great, but not anywhere near my $55B miss in April.

June is typically a strong revenue month as quarterly corporate and personal income taxes start flooding in after the 15th of the month. Because of this, there can be quite a bit of volatility. Last June posted a whopping $116B surplus on strong revenues, and a $60B payday loan from Fannie Mae. We won’t get another Fannie Mae bump this year, but it should still be a good month…I am predicting an $85B surplus for June 2014. Excluding Fannie Mae…revenues should be up on an extra business day, favorable timing, and moderate underlying growth. Outlays will also be up a bit for the same reasons.

The US Daily Cash Surplus for Wednesday 6/4/2014 was $5.5B dropping the deficit through 4 days to $17B.

Wednesday 6/4/2014 essentially looks like a carbon copy of Wednesday 6/5/2013…so no real change worth talking about. Through 3 business days, revenues are up 4.7% and outlays are up 7.1%, good for a $2B YOY increase in the deficit. I don’t really expect these % to hold up…there’s a lot of month left, and the outcome will largely be determined by the large corporate and taxes not withheld cash flows expected in the second half of the month.

The US Daily Cash Deficit for Tuesday 6/3/2014 was $29.5B bringing the June 2014 deficit to $22B through 3 days.

The first round of SS payments went out as expected totaling $24B and bringing 2013 and 2014 back into sync.  Surprisingly…outlays appear to be running hot at +$4B, while Revenues maintain their early $2B lead….resulting in a deficit $2B over last year. Honestly, it’s way too early in the month to even be looking, but with the YOY naturally syncing up so nicely this month…why not??

The US Daily Cash Surplus for Monday 6/2/2014 was $7.5B.

First…timing…as is standard, I will be comparing June 2014 vs. June 2013 primarily on day of week, which requires me adding one day to sync up 2013. For example, today, we are comparing Monday 6/3/2013 to Monday 6/2/2014.  Since both months start off on a Monday…we should get a pretty good side by side comparison all month long…until the very end where 2014 picks up an extra business day…Monday 6/30/2014. Monday’s generally have pretty strong revenues say $10-15B…so 2014 has a definite timing advantage…and all else equal we might expect a 4% revenue gain just on timing. Of course all is not equal…Last June received a $50-$60B revenue boost from Fannie Mae (though Treasury booked it as a negative expense…officially) that won’t be repeating itself. And who knows what is going to happen with tax deposits…which started the year off strong but have posted two months in a row under 2%… Bottom line, there are a lot of moving pieces and while revenue is just about certain to end up down…primarily I will be looking at tax deposits and backing out last year’s Fannie Mae windfall.

We start off June on a good note….though that will turn around tomorrow as round one of June SS payments go out 6/3….around $25B. Revenues start out at +$2B…not too shabby, and the deficit looks much improved, but most of that is the first SS payment is included in 2013, but won’t hit 2014 until tomorrow…where things should more or less normalize.