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Economy in Brief

U.S. Budget Deficit Halves in August Due to Calendar Quirks, Trending Toward Eight-Year Low
by Tom Moeller  September 14, 2015

The U.S. Treasury Department reported a $64.4 billion budget deficit during August, half the $128.7 billion deficit during August of 2014. An $84.0 billion deficit had been expected in the Action Economics Forecast Survey. Because August 1 occurred on a Saturday this year, the government indicated that roughly $42 billion in benefit payments were pulled into July. For the first eleven months of Fiscal Year 2015, the budget deficit eased to $530.0 billion, off 10% from the $589.2 billion deficit in the first eleven months of FY 2014. Budget deficits of $426 billion in FY 2015, then $414 billion in FY 2016 were called for in last month's updated projections from the Congressional Budget Office (CBO), the lowest deficits since 2007.

Continuing economic expansion left the gain in fiscal year-to-date revenues fairly steady at 8.0% after last year's 8.9% advance. So far this fiscal year, growth in individual income taxes strengthened to 11.8% y/y, roughly double last year's increase. Growth in corporate income taxes, however, halved to 8.6% y/y. Improved labor markets left social insurance taxes & contributions growing a lesser 3.8% y/y while excise taxes rose just 2.3% y/y.

Government spending growth so far this fiscal year of 4.8% y/y compared to a 1.4% advance during all of FY 2014. Quickened growth reflected a 26.8% y/y rise in spending for Education, Training, Employment & Social Services. Growth in outlays on health programs strengthened to 19.5% y/y with the Patient Protection and Affordable Care Act. Medicare spending growth ramped up to 7.2% y/y though Social Security payments growth was steady at 4.4% y/y. Veterans benefits & services growth eased to 2.3% y/y. These gains were countered by a 3.4% y/y drop in defense outlays which extended the declines of the prior three years. Income security payments fell 2.7% y/y with the lower unemployment rate while interest outlays declined 2.1% y/y.

An Update to the Budget and Economic Outlook: 2015 to 2025 from the Congressional Budget Office can be found here.

Haver's 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 August FY'14 FY'13 FY'12 FY'11
Budget Balance -- $-64.4 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 8.0% 8.9% 13.3% 6.4% 6.5%
  Individual Income Taxes 47 11.8 5.9 16.3 3.7 21.5
  Corporate Income Taxes 10 8.6 17.3 12.9 33.8 -5.4
  Social Insurance Taxes 34 3.8 8.0 12.1 3.2 -5.3
  Excise Taxes 3 2.3 11.1 6.3 9.2 8.2
Net Outlays (Y/Y % Change) 100 4.8 1.4 -2.4 -1.7 4.1
  National Defense 18 -3.4 -4.7 -6.3 -3.9 1.7
  Health 10 19.5 14.2 3.1 -7.0 1.0
  Medicare 14 7.2 2.8 5.5 -2.8 7.5
  Income Security 16 -2.7 -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 2.3 7.7 11.5 -2.0 17.3
  Education, Training, Employment & Social Services 3 26.8 25.9 -21.9 -10.3 -20.6
  Interest 6 -2.1 3.0 0.4 -3.0 15.8
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