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Economy in Brief

U.S. Fiscal 'YTD Budget Deficit Narrows As Receipt Decline Slows
Tom Moeller June 10, 2010

The Federal government ran a budget deficit last month of $135.9B. The shortfall pulled the YTD deficit to $935.6B but that was slightly diminished from the first eight months of  FY'09. The deficit's decline year-to-date is in line with the latest projection from the Nat'l Association For Business Economists of a diminished $1.310 trillion for 2010.

A slowing shortfall in net revenues during the first eight months of FY'10 helped ease the deficit. Individual income tax receipts fell 7.8% y/y as the unemployment rate remained elevated. The rate of decline, however, continued lower than the peak 29.0% at the end of last year. Corporate tax receipts rose 17.5% 'YTD versus the first eight months of last fiscal year with improved corporate profits, and the gain is accelerating. Year-to-date, employment taxes fell 4.4% (just lightly lower than the peak rate of decline) but unemployment insurance tax receipts improved by 13.4% versus the first eight months of last fiscal year. Estate & gift taxes fell by nearly one-quarter this fiscal year.

Overall, net outlays fell 3.5% so far this fiscal year versus FY'09 as a commerce & housing credit expired. "Income security" spending (11% of outlays) continued to jump by nearly  one-quarter while defense spending (19% of total outlays) rose 6.1%. Social Security payments (21% of outlays) rose 3.3% and net interest payments (5% of outlays) rose 9.6%. Medicare expenditures (12% of outlays) rose 5.1% and other health care services spending (10% of outlays) rose 11.2%.

The Government's financial data are available in Haver's USECON database, with extensive detail available in the specialized GOVFIN.

Fix Double Leverage Problem from the American Enterprise Institute can be found here here.

US Government Finance May FY 'YTD FY 'YTD FY 2009 FY 2008 FY 2007
Budget Balance $-135.9B $-935.6B -- $-1,417.1B $-454.8B $-161.5B
Net Revenues $146.8B $1,346.0B -2.0% -16.6% -1.7% 6.7%
Net Outlays $282.7B $2,281.6B -3.5% 18.2% 9.1% 2.8%
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