The U.S. federal government budget deficit of $52.8B in July that was somewhat shallower than Consensus estimates. The monthly deficit contrasted with a $69.2B deficit last July and during the first ten months of FY 2005 the deficit remained nearly one quarter lower than the prior fiscal year's first ten months.

Net receipt growth at 13.8% for the first ten months of FY05 continued to reflect the improved economy. Individual income taxes (44% of total receipts) rose 15.1% and corporate income taxes (10% of total receipts) rose 41.7%. The improved job market raised employment taxes (36% of total receipts) by 8.0%.

Federal outlay growth fell to 6.1% during the first ten months of FY05. Defense spending (19% of total outlays) grew 5.6% and Medicare spending (12% of total outlays) slowed to 7.5% growth. Growth in spending on social security (21% of total outlays) was about stable at 5.7% and spending on health programs (10% of the total) also was stable at 4.1%. Spending on education & training (4% of the total) grew 12.0% and interest expense (8% of the total) grew 12.3% with higher interest rates versus declines last year.

The latest from the Congressional Budget Office is available here.