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Economy in Brief

U.S. Budget Deficit Shrinks For FY'12
by Tom Moeller  October 15, 2012

The Federal Government Budget Deficit fell to $1,089B for all of FY'12 from $1,298B in FY'11, according to figures released Friday by the U.S. Treasury. In a sign of economic improvement, part of that shrinkage owed to a $75.0B surplus in September, the first September surplus since 2008. As a percent of GDP, the FY'12 deficit fell to 7.0% of GDP, its least in three years. Receipts totaled a stable 15.7% of GDP while outlays were a reduced 22.7% of GDP. For FY'13, OMB projections call for a deficit of $991B in FY'13 then $661B in FY'14.

Revenues for FY'12 rose 6.4% y/y. Individual income tax payments increased a modest 3.7% y/y with a 1.4% gain in payroll employment. Corporate tax payments jumped by more than one-third y/y with improved profitability and social insurance taxes rose 3.2%.

Outlays for last fiscal year fell 1.7% due to less spending in most subgroups. National defense payments fell 3.6% last fiscal year while health services spending also fell 7.0%. Income security payments fell 9.2% due to lower unemployment. Social security outlays gained 5.8% with more retirees but Medicare outlays fell 2.8%. Interest payments fell 2.1% y/y with lower interest rates. 

Haver's basic data on Federal Government outlays and receipts, and summary presentations of the Budget from both OMB and CBO are contained in USECON. Considerable detail is given in the separate GOVFIN database.

U.S. Monetary Policy and International Implications is the title of yesterday's speech by Federal Reserve chairman Ben. S. Bernanke and it can be found here.

US Government Finance Sept FY'12 FY'11 FY'10 FY'09
Budget Balance $75.0B $-1,089B $-1,298.7B $-1,294.2B $-1,415.7B
  As a percent of GDP -- 7.0 8.6 8.0 9.5
% of Total
Net Revenues (Y/Y % Change) 100 6.4% 6.5 2.7 -16.6
  Individual Income Taxes 47 3.7 21.5 -1.8 -20.1
  Corporate Income Taxes 8 33.8 -5.4 38.5 -54.6
  Social Insurance Taxes 36 3.2 -5.3 -2.9 -1.0
  Excise Taxes 3 9.2 8.2 7.1 -7.2
Net Outlays (Y/Y % Change) 100 -1.7 4.1 -1.8 18.2
  Nat'l Defense 20 -3.6 1.7 4.6 7.6
  Health 10 -7.0 1.0 10.4 19.1
  Medicare 20 -2.8 7.5 5.0 10.1
  Income Security 17 -9.2 -4.1 16.7 24.9
  Social Security 20 5.8 3.4 3.5 10.7
  Veterans Benefits 4 -2.0 17.3 13.6 12.7
  Interest 6 -2.1 15.8 2.9 -24.6
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