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Sunday, August 12, 2018

Good News, Bad News, Probably No News

The state controller's cash report for July is out. July is the first month of the 2018-19 fiscal year. The good news is that total revenues are up 8.9% from the same month last year. The bad news is that total revenues a 4.3% of what was forecast when the 2018-19 state budget was being enacted. Also not good is that the sales tax component - which is a proxy for consumption activity - is down from both the forecast levels and from last year. Is this an indication of some kind of slowdown? Does it instead relate to some one-off event such as wild fires?

Finally, with only one month's observation, what we have is most likely noise, unless the pattern persists.

You can find the controller's cash report for July at:
https://www.sco.ca.gov/Files-ARD/CASH/July%202018%20Statement%20of%20General%20Fund%20Cash%20Receipts%20and%20Disbursements.pdf.

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