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Economy in Brief

U.S. Government Budget Deficit Continues to Widen
by Tom Moeller  August 13, 2018

The U.S. Treasury Department reported that during the first ten months of fiscal year 2018, the federal government budget deficit totaled $684.0 billion, up 20.8% versus $566.0 billion in the first ten months of FY'17. During July alone, the federal government ran a $76.9 billion budget deficit. That compared to an $42.9 billion deficit during July 2017. An $88 billion had been expected in the Action Economics Forecast Survey.

Net revenues rose 1.0% y/y so far in FY'18 after a 1.5% increase during all of last fiscal year. Individual income taxes increased 7.8% y/y as employment continued to improve. That compared to a 2.7% rise during all of last fiscal year. Corporate income tax receipts declined by more than one-quarter y/y due to newly enacted tax cuts. That followed last fiscal year's 0.8% decline. Social insurance receipts were fairly steady y/y following last year's 4.2% rise, and excise taxes improved 8.5% y/y after last year's 11.8% decline.

Government spending increased 4.4% y/y so far in FY'18 compared to 3.3% growth during all of FY'17. National defense spending rose 5.6% y/y after slight increases during the last two fiscal years. Health insurance spending grew a steady 3.8% y/y, while Medicare outlays increased an accelerated 3.5% y/y. With the lower unemployment rate, income security payments slipped 0.1% y/y after their 2.1% FY'17 decline. Social Security payments rose an accelerated 4.5% y/y. Interest payments have gained 20.4% 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.

United States Government Finance July 2018 FY'17 FY'16 FY'15 FY'14 FY'13
Budget Balance (Billions) -- $-76.9 $-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 1.0% 1.5% 0.6% 7.6% 8.9% 13.3%
  Individual Income Taxes 47 7.8 2.7 0.3 10.5 5.9 16.3
  Corporate Income Taxes 9 -28.5 -0.8 -12.9 7.2 17.3 12.9
  Social Insurance Taxes 34 0.2 4.2 4.7 4.1 8.0 12.1
  Excise Taxes 3 8.5 -11.8 -3.3 5.3 11.1 6.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 4.4 3.3 4.5 5.3 1.4 -2.4
  National Defense 16 5.6 0.8 0.7 -2.3 -4.7 -6.3
  Health 12 3.8 4.1 6.2 17.8 14.3 3.3
  Medicare 14 3.5 0.6 8.7 6.7 2.8 5.5
  Income Security 12 -0.1 -2.1 1.0 -0.9 -4.3 -1.1
  Social Security 24 4.5 3.1 3.2 4.4 4.5 5.2
  Veterans Benefits & Services 4 6.0 1.2 9.3 6.8 7.7 11.5
  Education, Training, Employment & Social Services 2 -36.4 31.6 -10.2 34.7 25.9 -21.9
  Interest 9 20.4 9.2 7.8 -1.8 2.8 0.4
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