Daily Deficit

The US Daily Cash Deficit for Friday 3/21/2014 was $4.5B bringing the March 2014 deficit through 21 days to $26B for the month with six business days remaining.

No real movement since the last post. End of month’s can get a bit messy, but there is no reason at this time to move materially away from my original forecast of a $15B deficit for the month. Looking at the remaining days… odds are we’ll end up under that, perhaps even at a surplus if we end the month with strong revenues, but don’t look for a huge beat, even with some nice big checks from Fannie/Freddie headed our way 3/31.

Perhaps more interesting is the coming month of April. Typically the best month of the year thanks to 4/15 tax payments, last April posted a $117B surplus as revenues surged 27% YOY. If they continue surging, seeing a $150-$200b surplus next month seems likely assuming 8-10% growth….growth over that could spike the surplus even more.

The US Daily Cash Deficit for Wednesday 3/19/2014 was $11.2B bringing the March 2013 cash deficit through 19 days to $15B with 8 business days remaining.

Revenue was up driven by Federal Reserve “Earnings” if you want to call them that and lower tax refunds. Outlays were up a bit as well primarily driven by a $12.7B SS payment bringing the monthly total to $50.7B with one large ~12B payment remaining next Wednesday.

As it stands, March revenue is sitting at +13% already even though it is down a business day to 2013, so look for that to continue to grow. For the year, we are currently at +10% revenues…outlays are down 2%.  It’s still early, but this is looking like it may be another year of great improvement….and that’s coming from an admitted pessimist 🙂

The US Daily Cash Deficit for Tuesday 3/18/2014 was $7.0B pulling the month back to a deficit…$4B for the month through 18 days.

The day was pretty much in lockstep with last year, so no news there. For the month, one of the interesting series I am following is Medicaid outlays. After averaging a little under $22B per month in 2013, we’ve seen what looks like a jump to just under $24B per month through 2 months of 2014. 2013 growth was at 5% over 2013….2014’s current pace is about 11% over 2013. Now we know that Medicaid was expanded by Obamacare, so I would guess that has something to do with it. However, I would have guessed that Medicaid payments for new enrollees for service 1/1/2014 would take a few months to be processed as cash payments….but we clearly saw the increase in January. It will be interesting to see where March ends up. Another $24B month would pretty much confirm that the last 2 months were not just random noise. Anything over $26B would be alarming. We are currently at $14.35B through 12 business days with 9 remaining. Pencil that out, and you get to $25B. However…this series is a bit random in its day to day, so we’ll just have to wait and see.

Finally…for a bit of perspective on that ~$2B increase….revenues were up YOY $36B over the last 2 months for an $18B/month rate. As long as revenue continues to grow at that rate….the deficit will continue to shrink….even against the growth in SS/Medicare/Medicaid. However…when that revenue growth stops or goes negative…watch out!!

The US Daily Cash Surplus for Monday 3/17/2014 was $44B, wiping out the monthly deficit to date and pushing us to a $3B surplus for the month through 17 days.

This revenue surge was not unexpected….the $21B of corporate taxes collected makes up for the shortfall noted yesterday, and pushes 2014 to $33B vs $30B in 2013 over the same 17 days…..good for a 10% increase…thus answering that question….corporate taxes are certainly not collapsing at this point in time. For the year (through 76 days) corporate taxes are up 16% over 2013.

There really aren’t any big items left this month other than the day to day swings we normally see. My monthly forecast stands at $15B deficit, but given the trend, it is looking like ending the month with a small surplus is a definite possibility if revenues continue to over perform expectations and refunds continue to fall short.

The US Daily Cash Surplus for Friday 3/14/2014 was $4.8B, following the 3/13 deficit of $5.4B, leaving the March 2014 deficit through 14 days to $41B.

Looking at revenue…we appear to have taken a large step back to -$12B YOY, but what we really have is a timing issue with corporate taxes that will likely work itself out after tomorrow’s report. Ignoring corporate taxes, revenue through almost half the month still looks on track to match the ~10% or so gains we’ve seen over the first two months. Refunds are still trending down… at -$7B so far, though we are still up for the year.

Outlays are down $40B….$35B due to the shift into February, and the remaining likely due to the extra day 2013 has over 2014 so far due to how we are syncing the days up. Put it all together and it’s still looking like a pretty good month….outlays will almost certainly be down big, and revenue is trending up.