Recent Updates

  • Euro area: Flash Consumer Confidence (Jun)
  • US: Personal Income by Region and State (Q1)
  • US: Philadelphia FRB Mfg Business Outlook Survey (Jun)
  • France: Business Surveys: Industry, Composite Indicators, Construction, Services (Jun)
  • UK: Public Sector Finances (May)
  • Turkey: Consumer Confidence Index (Jun); South Africa: BOP, IIP (Q1); Israel: IP (Apr); Palestine: IIP (Q1-Prelim); Lebanon CPI (May)
  • more updates...

Economy in Brief

U.S. Budget Deficit Shrinks; Revenues Jump and Spending Falls
by Tom Moeller  November 13, 2013

The Federal Government ran a $91.6 billion budget deficit during October of FY 2014. During October of last year the government ran a $120.0 billion deficit. The latest figure compared to the Action Economics Forecast Survey expectation of a $104.2 billion shortfall. The shrinking budget deficit continues the improvement which was notable last year. The FY 2013 deficit of $680.3 billion was down sharply from $1,089 billion in FY 2012 and the $1,416 billion peak in FY 2009.

Driving the improvement in October's budget balance was a 7.9% y/y rise in revenues. That reflected a three-fold surge in corporate tax payments as well as a 20.5% y/y rise in social insurance tax payments, the result of higher employment and the expiration of the social security tax cut. Individual income tax payments fell slightly following a surge earlier this year. For FY 2013, personal revenues rose 13.3% y/y. The improved labor market raised income taxes 16.3% from FY'12. Corporate taxes also jumped due to improved profits while social insurance taxes gained 12.1% y/y with higher payrolls.

On the spending side, sequestration and the government shutdown helped net outlays fall 4.5% y/y, following declines of 2.4% y/y and 1.7% y/y during the prior two fiscal years. Declines in defense outlays occurred with the winding down of the war in Afghanistan. Medicare outlays also were off 2.4% y/y during the last twelve months. Income security payments fell 5.1% y/y and have been down since late-2010 with the improved job market. Interest payments likewise fell a sharp 18.1% y/y with the deficit's decline. To the upside, health program outlays increased 6.8% y/y after a 3.1% gain last fiscal year. Social security outlays gained 5.1% y/y after a like rise in FY 2013. Veterans benefits rose 6.7% y/y after an 11.5% rise last fiscal year.

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.

 US Government Finance Oct FY'13 FY'12 FY'11 FY'10
Budget Balance -- $91.6B $-680.3B $-1,089B $-1,298.7B $-1,294.2B
  As a percent of GDP -- -- 4.1 6.8 8.4 8.8
% of Total YTD FY'14
Net Revenues (Y/Y % Change) 100 7.9% 13.3% 6.4% 6.5% 2.7%
  Individual Income Taxes 47 -2.9 16.3 3.7 21.5 -1.8
  Corporate Income Taxes 10 400 12.9 33.8 -5.4 38.5
  Social Insurance Taxes 34 20.5 12.1 3.2 -5.3 -2.9
  Excise Taxes 3 -12.2 6.3 9.2 8.2 7.1
Net Outlays (Y/Y % Change) 100 -4.5 -2.4 -1.7 4.1 -1.8
  National Defense 18 -8.3 -6.3 -3.9 1.7 4.6
  Health 10 6.8 3.1 -7.0 1.0 10.4
  Medicare 14 -2.4 5.5 -2.8 7.5 5.0
  Income Security 16 -5.1 -1.1 -9.1 -4.1 16.7
  Social Security 24 5.1 5.2 5.8 3.4 3.5
  Veterans Benefits 4 6.7 11.5 -2.0 17.3 13.6
  Interest 6 -18.1 0.4 -3.0 15.8 2.9
close
large image