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Economy in Brief

June U.S. Budget Surplus As Expected
by Tom Moeller July 13, 2006

The U.S. federal government ran a budget surplus in June, as it usually does. The as expected figure of $20.5B narrowed the FY06 to-date budget deficit to $206.5B versus a deficit of $249.4B during the first nine months of FY05.

Growth in '06 net revenues FYTD versus the first nine months of FY05 remained strong at 12.8%. Individual income tax receipts (44% of total receipts) rose 14.5% FYTD as withheld taxes rose 8.4% due to improved job markets and non-withheld taxes surged 21.7%. The improved job market also lifted employment taxes (36% of total receipts) 6.3% y/y.

Corporate income taxes (10% of total receipts) surged 27.0% y/y during FY06's first nine monthsand estate & gift taxes rose 15.1% y/y.

U.S. net outlays rose 8.8% FYTD versus '05. Defense spending (19% of total outlays) rose 7.8% during the first nine months of FY06 versus '05.Medicare spending (12% of total outlays) jumped 16.5% and spending on social security (21% of total outlays) remained strong at 5.8%. Spending on income security grew just 2.7%.

Social Security and Medicare : the impending fiscal challenge from the Federal Reserve Bank of Kansas City can be found here.

The Mid-Session Review of the U.S. Government Budget for FY 2007 is available here.

US Government Finance June May Y/Y FY 2005 FY 2004 FY 2003
Budget Balance $20.5B $-42.8B $22.9B (6/05) $-318.3B $-412.7B $-377.6B
  Net Revenues $264.4B $192.7B 12.6% 14.5% 5.5% -3.8%
  Net Outlays $243.9B $235.5B 15.1% 7.8% 6.2% 7.4%
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