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Economy in Brief

Revenue Surge Benefits U.S. Budget
by Tom Moeller February 12, 2007

The U.S. federal government ran a surplus of $38.2B during January, nearly double the surplus of $21B during January 2006.

The monthly figure was near Consensus expectations for a surplus of $40B. Analysts' forecasts of the Federal budget benefit from access to the Government's Daily Treasury Statement, the data for which is available in Haver's DAILY database.

The latest figure pulled the deficit for the first third of FY07 to $42.2B, less than half the deficit during last fiscal year's first four months. As a percentage of GDP, the U.S. budget deficit during this year's first four months fell to an insignificant 0.3% of GDP.

Net revenues grew 9.7% y/y during the first four months of FY07. Individual income tax receipts (44% of total receipts) grew 12.6%. Corporate income taxes (13% of total receipts) surged 16.4% as corporate profits grew. Estate & gift taxes grew 7.9% but higher employment levels did not raise unemployment receipts which fell by 3.9%.

U.S. net outlays grew 2.1% during this fiscal year's first four months versus last year driven by a 9.7% surge in defense spending (19% of total outlays). Medicare expenditures (12% of outlays) also surged by 27.2%. Social security spending (21% of outlays) rose 5.7% but the recent bond market rally dropped the government's interest expense by 1.2% y/y.

The latest Budget of the United States Government can be found here.

The State of the U.S. Economy, last week's speech by William Poole, President, Federal Reserve Bank of St. Louis is available here.

US Government Finance   January December Y/Y FY 2006 FY 2005 FY 2004
Budget Balance $38.2B $42.0B $21.0B
-$247.7 -$318.7B -$412.7B
Net Revenues $260.6B $260.0B 13.3% 11.8% 14.5% 5.5%
Net Outlays $222.4B $218.0B 6.4% 7.4% 7.8% 6.2%
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