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Economy in Brief

U.S. Government Budget Deficit Deepens
by Tom Moeller  November 13, 2018

The U.S. Treasury Department reported that the federal government ran a $100.5 billion budget deficit during October, the first month of the new fiscal year. The deficit compared to a shortfall of $63.2 billion during October 2017. A $122 billion deficit had been expected in the Action Economics Forecast Survey.

Net revenues increased 7.4% y/y, led by a surge in corporate income tax receipts. Individual income taxes increased 0.8% y/y, compared to a 6.1% rise during all of FY'17. Social insurance receipts rose 3.0% y/y following last year's 0.8% gain, and excise taxes nearly doubled y/y after last year's 13.3% increase.

Government spending increased 18.3% y/y after two years of modest growth. National defense spending rose 11.1% y/y after a 5.3% gain last year. Health insurance spending increased 5.0% y/y while Medicare outlays roughly doubled y/y. Growth in income security payments surged. Social Security payments rose a steady 5.0% y/y. Interest payments increased by 12.4% y/y with the larger budget deficit.

Receipt & outlay figures often are quite variable y/y near the start of a new 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 Oct FY'18 FY'17 FY'16 FY'15
Budget Balance (Billions) -- $-100.5 $-779.0 $-665.8 $-585.6 $-439.1
  As a percent of GDP -- -- 3.9% 3.5% 3.2% 2.5%
% of Total
Net Revenues (Fiscal Year YTD 2018, Y/Y Change) 100 7.4% 0.4% 1.5% 0.6% 7.6%
  Individual Income Taxes 51 0.8 6.1 2.7 0.3 10.5
  Corporate Income Taxes -- 214.5 -31.1 -0.8 -12.9 7.2
  Social Insurance Taxes 35 3.0 0.8 4.2 4.7 4.1
  Excise Taxes 3 97.2 13.3 -11.8 -3.3 5.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 18.3 3.2 3.3 4.5 5.3
  National Defense 16 11.1 5.3 6.1 0.7 -2.3
  Health 13 5.0 3.3 -1.9 6.2 17.8
  Medicare 14 107.6 -1.4 0.6 8.7 6.7
  Income Security 12 41.1 -1.6 -2.1 1.0 -0.9
  Social Security 24 5.0 4.5 3.1 3.2 4.4
  Veterans Benefits & Services 4 102.6 1.3 1.2 9.3 6.8
  Education, Training, Employment & Social Services 2 5.0 -34.0 31.6 -10.2 34.7
  Interest 8 12.4 23.6 9.1 7.8 -1.8
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