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Economy in Brief

U.S. Government Budget Deficit Widens This Year
by Tom Moeller  July 12, 2018

The U.S. Treasury Department reported that during the first nine months of fiscal year 2018, the federal government budget deficit totaled $607.1 billion, up 16.1% versus $523.1 billion in the first nine months of FY'17. During June alone, the federal government ran a $74.9 billion budget deficit. That compared to a $90.2 billion deficit during June 2017. A $101 billion had been expected in the Action Economics Forecast Survey.

Net revenues rose 1.3% y/y so far in FY'18 after a 1.5% increase during all of last fiscal year. Individual income taxes increased 8.9% y/y following a 2.7% rise during all of last fiscal year. Newly enacted tax cuts reduced corporate income tax receipts by more than one quarter y/y after last fiscal year's 0.8% decline. Social insurance receipts held fairly steady y/y following last year's 4.2% rise, and excise taxes improved 9.9% y/y following last year's 11.8% decline.

Government spending increased 3.9% y/y so far in FY'18 compared to 3.3% growth during all of FY'17. National defense spending rose 5.5% y/y after slight increases during the last two fiscal years. Health insurance spending grew a steady 3.9% y/y, while Medicare outlays increased an accelerated 3.3% y/y. With the lower unemployment rate, income security payments slipped 0.3% y/y after their 2.1% FY'17 decline. Social Security payments rose an accelerated 4.4% y/y. Interest payments gained 18.5% y/y so far in FY'18 after increasing 9.2% last fiscal 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.

Fiscal Policy in Good Times and Bad from the Federal Reserve Bank of San Francisco is available here.

United States Government Finance June 2018 FY'17 FY'16 FY'15 FY'14 FY'13
Budget Balance (Billions) -- $-74.9 $-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 1.3% 1.5% 0.6% 7.6% 8.9% 13.3%
  Individual Income Taxes 47 8.9 2.7 0.3 10.5 5.9 16.3
  Corporate Income Taxes 9 -27.6 -0.8 -12.9 7.2 17.3 12.9
  Social Insurance Taxes 34 -0.1 4.2 4.7 4.1 8.0 12.1
  Excise Taxes 3 9.9 -11.8 -3.3 5.3 11.1 6.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 3.9 3.3 4.5 5.3 1.4 -2.4
  National Defense 15 5.5 0.8 0.7 -2.3 -4.7 -6.3
  Health 15 3.9 4.1 6.2 17.8 14.3 3.3
  Medicare 15 3.3 0.6 8.7 6.7 2.8 5.5
  Income Security 13 -0.3 -2.1 1.0 -0.9 -4.3 -1.1
  Social Security 24 4.4 3.1 3.2 4.4 4.5 5.2
  Veterans Benefits & Services 4 5.8 1.2 9.3 6.8 7.7 11.5
  Education, Training, Employment & Social Services 4 -38.6 31.6 -10.2 34.7 25.9 -21.9
  Interest 7 18.5 9.2 7.8 -1.8 2.8 0.4
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