Commission on Government Forecasting and Accountability
HOUSE
C.D. Davidsmeyer, Co-Chair
SENATE
Heather Steans, Co-Chair
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October 2018 Monthly Briefing
HIGHER LEVELS OF INFLATION
Benjamin L. Varner, Senior Analyst and Economic Specialist

In June and July of 2018, the CPI for all urban consumers (CPI-U) which represents approximately 93% of the total U.S. population reached a 6-year high. The year-over-year percentage change in the non-seasonally adjusted CPI was 2.9% in the U.S. This was the highest level since February of 2012. Inflation has been steadily growing since the beginning of 2015. The increase in inflation in June and July was associated with increases in shelter costs (rent or owner’s equivalent rent of primary residence) which accounts for approximately 1/3rd of the basket of goods measured by the CPI. Shelter costs were up 3.4% in June and 3.5% in July. Increases in energy and transportation prices also added to the growth in inflation.

REVENUE: PERSONAL INCOME AND SALES TAX DO WELL IN OCTOBER AS OVERALL TRANSFERS WEAKEN
Jim Muschinske, Revenue Manager

Excluding $204 million in interfund borrowing last October, as well as $500 million related to the Treasurer’s Investment transfers per P.A. 100-1107, base revenues grew $205 million this October. A good month for personal income tax and sales taxes were partially offset by a comparatively weaker month in overall transfers. Federal sources, while disappointing on an absolute basis, did manage to contribute to the monthly gain as last year’s monthly receipts were even weaker. The month had one more receipting day compared to the prior year.
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Excluding $354 million in interfund borrowing last fiscal year, and the $700 million related to the Treasurer’s Investments this fiscal year, the first third of FY 2019 show general funds ahead of last year by $595 million. Gross personal income tax is up by $878 million, or $737 million net. Gross sales tax receipts are up by $154 million, or $136 million net. Gross corporate income taxes are up by $138 million, or $119 million net. All other tax sources combined added $69 million to the year-to-date gain.