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Economy in Brief

July U.S. Budget Deficit Better Than Expected
by Tom Moeller August 10, 2006

The U.S. federal government ran a budget deficit of $33.2 billion in July, somewhat better than consensus expectations of $44 billion. The July shortfall brought the fiscal year 2006 ten-month total deficit to $239.7 billion compared with a deficit of $302.8B for the same period in FY2005. The budget deficit for the full FY2006 was estimated last month at $295.8B by the Office of Management and Budget in its Mid-Session Review.

Growth in FYTD 2006 net revenues versus the first ten months of FY2005 was 12.8%. Individual income tax receipts (44% of total receipts) were 14.6% higher FYTD as withheld taxes rose 9.0% and non-withheld taxes soared 21.6%. Corporate income taxes (13% of total receipts) rose a strong 26.9% and estate and gift taxes increased by 15.3%.

U.S. net outlays rose 7.8% FYTD compared with the first ten months of FY 2005. Defense spending (19% of total outlays) was up 5.8%. Medicare expenditures (12% of outlays) advanced 12.7% and social security spending (21% of outlays) rose 5.8%.

US Government Finance   July June Y/Y FY 2005 FY 2004 FY 2003
Budget Balance -$33.2B $20.5B -$53.4B
-$318.3B -$412.7B -$377.6B
Net Revenues $159.8B $264.4B +12.4% +14.5% +5.5% -3.8%
Net Outlays $193.0B $243.9B -1.3% +7.8% +6.2% +7.4%
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