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Economy in Brief

U.S. June Budget Surplus Up, FYTD Deficit More Than Doubled
by Tom Moeller July 11, 2008

The U.S. government ran a budget surplus in June, as it usually does, of $50.7B. In fact, the surplus was double the size it was during the past several years. Based on expectations formed by Public Debt Transactions from the Daily Treasury Statement, the budget surplus beat the Consensus forecast for a $30.0B surplus. These transactions data are available in Haver's DAILY database.

That, however, is where the good news on the Federal budget front ends. For the first nine months of FY08 the government ran a budget deficit of $268.7B which was more than double the deficit during the first nine months of FY07.

For the fiscal year to date federal receipts fell 0.6% from a year earlier, the first negative comparison since 2003 and it compared to 7.5% y/y growth during the first nine months of FY07. Higher unemployment pulled the growth in individual income tax receipts (44% of total receipts) to a negative 0.8% this year versus 11.5% growth in FY07. Growth in withheld income taxes of 4.8% was roughly half that of a year earlier and non-withheld taxes grew 5.2%, or nearly one third as during the first nine months of FY07.

Lower corporate profitability provided a further crimp to government revenues. Corporate income taxes (13% of total receipts) declined 7.5% decline from receipts during the first nine months of FY07. During FY07 they rose 10.0% during the first nine months.

Unemployment insurance contributions fell 2.5% FYTD due to negative employment growth but Federal excise taxes rose 5.8%. Estate and gift taxes rose 13.6%.

U.S. net outlays grew 6.6% during the first nine months of FY08. That growth was more than double the outlay growth of FY07's first nine months. Growth in defense spending (19% of total outlays) led the doubling with a 10.1% gain while growth in transportation spending surged to 7.5% from 1.8% in FY07's first nine months.

Medicare expenditures (12% of outlays) actually fell 1.8% but health spending (10% of total outlays) held constant at a 5.4% growth rate. Growth in Social Security spending (21% of outlays) also held steady at 5.3% while growth in interest expense also held steady at 4.3%. Growth in outlays for income security (15% of outlays) surged to 17.5% from 4.4%.

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

US Government Finance   June May Y/Y FY 2007 FY 2006 FY 2005  
Budget Balance $50.73B -$165.9B $27.5B (6/07) -$162.0B -$248.2B -$318.7B
Net Revenues $259.9 $124.3B -6.0% 6.7% 11.8% 14.1%
Net Outlays $209.2 $290.2B -16.0% 2.8% 7.4% 7.6%
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