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Economy in Brief

U.S. Budget Surplus Lowers the Deficit Year-to-Date
by Tom Moeller  July 13, 2015

The Federal Government reported a $51.8 billion budget surplus during June compared to a $70.5 billion surplus during June of 2014. A $41.0 billion surplus had been expected in the Action Economics Forecast Survey. For the first nine months of Fiscal Year 2015, the budget deficit eased to $313.4 billion compared to a $365.9 billion deficit in the first nine 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 2016.

The easing of the budget deficit so far this fiscal year versus FY'14 occurred as June revenues rose 6.0% y/y, leaving overall fiscal year-to-date receipts up 8.3% y/y. So far this fiscal year, individual income taxes increased 11.6% y/y. Growth in corporate income taxes remained strong at 8.7% y/y. Improved labor markets left social insurance taxes & contributions growing 4.0% y/y while excise taxes improved 3.6% y/y.

Government spending growth so far this fiscal year decelerated to 5.1% y/y as defense outlays fell 1.7% y/y. Growth in spending on health programs, however, remained firm at 18.4% y/y with the Patient Protection and Affordable Care Act. Spending growth for Education, Training, Employment & Social Services also remained strong at 19.7% y/y. Medicare spending growth recovered 8.0% y/y. Veterans benefits growth picked to 6.1% y/y while Social Security payments growth was steady at 4.4% y/y. Interest payments declined 5.2% 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 Jun FY'14 FY'13 FY'12 FY'11
Budget Balance -- $51.8 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 8.3% 8.9% 13.3% 6.4% 6.5%
  Individual Income Taxes 47 11.6 5.9 16.3 3.7 21.5
  Corporate Income Taxes 10 8.7 17.3 12.9 33.8 -5.4
  Social Insurance Taxes 34 4.0 8.0 12.1 3.2 -5.3
  Excise Taxes 3 3.6 11.1 6.3 9.2 8.2
Net Outlays (Y/Y % Change) 100 5.1 1.4 -2.4 -1.7 4.1
  National Defense 18 -1.7 -4.7 -6.3 -3.9 1.7
  Health 10 18.4 14.2 3.1 -7.0 1.0
  Medicare 14 8.0 2.8 5.5 -2.8 7.5
  Income Security 16 - 1.8 -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 6.1 7.7 11.5 -2.0 17.3
  Education, Training, Employment & Social Services 3 19.7 25.9 -21.9 -10.3 -20.6
  Interest 6 -5.2 3.0 0.4 -3.0 15.8
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