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Economy in Brief

U.S. Government Budget Balance Deteriorates
by Tom Moeller  February 12, 2018

The U.S. Treasury Department reported that the federal government ran a $49.2 billion budget deficit during January 2018. A surplus of $50.0 billion had been expected in the Action Economics Forecast Survey. During the first four months of fiscal year 2018 the deficit totaled $175.7 billion, up 10.8% versus the first four months of FY'17.

Net revenues rose 4.2% y/y so far in FY'18. Individual income taxes increased 9.6% y/y following a 2.7% rise during all of last year. The gain in social insurance receipts eased to 2.7% y/y and excise taxes improved 13.2% y/y following last year's 11.8% shortfall. The rate of decline in corporate income taxes picked up to -11.0% y/y after falling 0.8% during all of last fiscal year.

Government spending increased 5.1% y/y so far in FY'18 compared to 3.3% growth during all of FY'17. National defense spending rose 4.6% y/y after slight increases during the last two fiscal years. Health insurance spending eased 0.4% y/y following two years of single-digit growth, while Medicare outlays increased 1.9% y/y. Income security payments rose 2.3% y/y after their 2.1% FY'17 decline. Social Security payments increased a steady 3.7% y/y. Interest payments rose 15.9% y/y after 9.2% growth last year.

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.

United States Government Finance Jan 2018 FY'17 FY'16 FY'15 FY'14 FY'13
Budget Balance (Billions) -- $49.2 $-665.7 $-585.6 $-439.1 $-483.4 $-680.2
  As a percent of GDP -- -- 3.5% 3.2% 2.5% 2.8% 4.1%
% of Total
Net Revenues (Fiscal Year YTD 2018, Y/Y % Change) 100 4.2% 1.5% 0.6% 7.6% 8.9% 13.3%
  Individual Income Taxes 47 9.6 2.7 0.3 10.5 5.9 16.3
  Corporate Income Taxes 9 -11.0 -0.8 -12.9 7.2 17.3 12.9
  Social Insurance Taxes 34 2.7 4.2 4.7 4.1 8.0 12.1
  Excise Taxes 3 13.2 -11.8 -3.3 5.3 11.1 6.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 5.1 3.3 4.5 5.3 1.4 -2.4
  National Defense 15 4.6 0.8 0.7 -2.3 -4.7 -6.3
  Health 15 -0.4 4.1 6.2 17.8 14.3 3.3
  Medicare 15 1.9 0.6 8.7 6.7 2.8 5.5
  Income Security 13 2.3 -2.1 1.0 -0.9 -4.3 -1.1
  Social Security 24 3.7 3.1 3.2 4.4 4.5 5.2
  Veterans Benefits & Services 4 6.3 1.2 9.3 6.8 7.7 11.5
  Education, Training, Employment & Social Services 4 11.9 31.6 -10.2 34.7 25.9 -21.9
  Interest 7 15.9 9.2 7.8 -1.8 2.8 0.4
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