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Economy in Brief

U.S. April Budget Surplus Down, 2008 FYTD Deficit Nearly Doubled
by Tom Moeller May 12, 2008

As it usually does in April, the U.S. government ran a budget surplus of $159.3B. The figure was down slightly, however, from last year's unusually large April surplus of $177.7B. Based on expectations formed by Public Debt Transactions from the Daily Treasury Statement, the budget surplus equaled the Consensus forecast. These Transactions data are available in Haver's DAILY database.

For the first seven months of FY08 the government ran a budget deficit of $152.2B; nearly double the deficit of $80.8B during the first seven months of FY07.

For the fiscal year to date, federal receipts grew a paltry 3.0% from a year earlier. That compared to 11.2% y/y growth during the first seven months of FY07. Higher unemployment constrained the growth in individual income tax receipts (44% of total receipts) to 6.0% this year. Seventeen percent y/y growth had been logged during the first seven months of FY07. Growth in withheld income taxes of 5.6% was roughly half that of a year earlier and non-withheld taxes grew 7.3%, or roughly one quarter as during the first seven months of FY07.

Lower corporate profitability continued to crimp government revenues. Corporate income taxes (13% of total receipts) amounted to $207.0B, a 6.0% decline from receipts during the first seven months of FY07. During FY07 they rose 13.4% during the first seven months.

Unemployment insurance contributions fell 2.7% FYTD due to negative employment growth and Federal excise taxes fell 1.1%.

U.S. net outlays grew 7.4% during the first seven months of FY08, more than double the outlay growth of FY07's first seven months. Growth in defense spending (19% of total outlays) also nearly doubled to a 10.6% growth rate but Medicare expenditures (12% of outlays) grew a much slower 2.1%. Growth in Social Security spending (21% of outlays) held about steady at 5.4% and interest expense grew 8.6%, held back by the recent decline in interest rates. Growth in outlays for income security (15% of outlays) held steady at 15.1% and health spending (10% of the total) grew 5.7%.

The Government's financial data is available in Haver's USECON database.

How Do EITC Recipients Spend Their Refunds? from the Federal Reserve Bank of Chicago can be found here.

Financial Market Tremors: Causes and Responses is from Dallas Federal Reserve Bank President Richard W. Fisher and it is available here.

US Government Finance   April March Y/Y FY 2007 FY 2006 FY 2005  
Budget Balance -$48.1B -$175.6B -$96.3B (3/07) -$162.0B -$248.2B -$318.7B
Net Revenues $178.9 $105.7B 7.4% 6.7% 11.8% 14.1%
Net Outlays $227.0 $281.3B -13.4% 2.8% 7.4% 7.6%
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