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Economy in Brief

U.S. Budget Deficit Continues to Lessen
by Tom Moeller  June 10, 2015

The Federal Government reported an $82.4 billion budget deficit during May compared to a $130.0 billion deficit during May of 2014. A $98.0 billion deficit had been expected in the Action Economics Forecast Survey. For the first eight months of Fiscal Year 2015, the deficit eased to $365.2 billion compared to a $436.4 billion deficit in the first eight months of FY 2014. Projections from the Congressional Budget Office call for a budget deficit of $486 billion in FY 2015 compared to $483.4 billion last year, then a $455 billion deficit in FY 20016.

The easing of the budget deficit so far this fiscal year versus FY'14 occurred as May revenues rose 6.3% y/y, leaving overall fiscal year-to-date receipts up 8.6% y/y. So far this fiscal year, individual income taxes increased 12.4% y/y. Growth in corporate income taxes remained strong at 10.8% y/y. Improved labor markets left social insurance taxes & contributions growing 3.7% y/y while excise taxes improved 2.8% y/y.

Government spending growth so far this fiscal year decelerated to 4.0% y/y as defense outlays fell 3.3% y/y. Growth in spending on health programs, however, remained firm at 18.9% y/y with the Patient Protection and Affordable Care Act. Spending growth for Education, Training, Employment & Social Services also remained strong at 18.1% y/y. Medicare spending growth eased to 2.8% y/y. Veterans benefits growth diminished to near zero y/y while Social Security payments growth was steady at 4.4% y/y. Interest payments declined 5.7% y/y.

Haver's basic data on Federal Government outlays and receipts are contained in USECON. Considerable detail is given in the separate GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.

 US Government Finance May FY'14 FY'13 FY'12 FY'11
Budget Balance -- $-82.4 bil. $-483.4 bil. $-680.2 bil. $-1,089.2 bil. $-1,296.8 bil.
  As a percent of GDP -- -- 2.8 4.1 6.8 8.4
% of Total FY'15 YTD
Net Revenues (Y/Y % Change) 100 8.6% 8.9% 13.3% 6.4% 6.5%
  Individual Income Taxes 47 12.4 5.9 16.3 3.7 21.5
  Corporate Income Taxes 10 10.8 17.3 12.9 33.8 -5.4
  Social Insurance Taxes 34 3.7 8.0 12.1 3.2 -5.3
  Excise Taxes 3 2.8 11.1 6.3 9.2 8.2
Net Outlays (Y/Y % Change) 100 4.0 1.4 -2.4 -1.7 4.1
  National Defense 18 -3.3 -4.7 -6.3 -3.9 1.7
  Health 10 18.9 14.2 3.1 -7.0 1.0
  Medicare 14 2.8 2.8 5.5 -2.8 7.5
  Income Security 16 -3.9 -4.3 -1.1 -9.1 -4.1
  Social Security 24 4.4 4.6 5.2 5.8 3.4
  Veterans Benefits & Services 4 0.1 7.7 11.5 -2.0 17.3
  Education, Training, Employment & Social Services 3 18.1 25.9 -21.9 -10.3 -20.6
  Interest 6 -5.7 3.0 0.4 -3.0 15.8
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