The May release came out earlier this week and was a real whopper. It was quite high and well outside the 95% confidence interval of the forecast from last month. We need another month, or months, of data to determine the impacts of the tax increase though. This number could be high in anticipation of the higher rate, or it could be pent up demand shifted to March due to bad weather in January or February. Easter also occurred in March this year and, as my forecasting class saw, that increased sales tax collections in Grand Forks in the past so it could be that situation again. It could also be related to tax cuts at the federal level though I am a bit skeptical that it would just start showing up in spending data for March. Like I said though we need to see where it is at over the next few months before determining the longer term trajectory. Here is the updated forecast.
There is still a flattening out with a slighter decline now, but this can quickly reverse direction. Also, the forecast standard error is still quite large and is a bit of a concern. I have not found what I consider to be a proper scaling at this point so I continue that search.
With the updated I also decided for this month to show how the forecast changed based on the new data.
There are a few shape changes for the most recent data and there is a definitive shift up in the forecast through 2020. In the next few months we can probably start arriving at estimates about the likelihood of paying off the debt incurred with the new tax revenues.