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Economy in Brief

U.S. Government Budget Deficit Deepens YTD
by Tom Moeller  July 11, 2019

The U.S. Treasury Department reported that the federal government ran an $8.5 billion budget deficit during June compared to a $74.9 billion deficit one year earlier. A $6.4 billion deficit had been expected in the Action Economics Forecast Survey. During the first nine months of FY'19, the budget deficit deepened to $747.1 billion compared to a deficit of $607.1 billion during the first nine months of FY'18.

Growth in tax receipts picked up a bit. Net revenues rose 2.7% y/y so far this fiscal year compared to a 1.3% y/y gain during in first nine months of FY'18. Individual income receipts eased 0.3 y/y so far in FY'19, compared to an 8.9% y/y rise in the first nine months of FY'18. Corporate tax receipts increased 1.7% y/y so far this year after a 27.6% nine-month y/y drop last year. Social insurance receipts rose 7.0% y/y following little change y/y nine months into FY'18. Excise taxes rose by 12.9% y/y after last year's 9.9% y/y rise nine months into the fiscal year.

At the same time, spending growth quickened to an even greater extent. Government spending increased 6.6% y/y so far in FY'19 after a 3.9% y/y rise last year over the same nine-month period. National defense spending strengthened 8.4% y/y following a 0.4% y/y rise in the first nine months last year. Medicare outlays rose by 6.4% y/y following a 3.3% nine-month rise last year. Growth in income security payments increased 2.4% y/y so far in FY'19 after a slight decline in the first nine months of FY'18. Social Security payments gained 5.6% y/y after rising 4.4% y/y in the first nine months of FY'18. Offsetting these accelerations, spending on health programs increased 5.9% y/y, roughly half the gain last year. Interest payments rose by 16.4% y/y, slightly less than last year's increase.

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.

The minutes to the latest FOMC meeting can be found here.

United States Government Finance June FY'18 FY'17 FY'16 FY'15
Budget Balance (Billions) -- $-8.5 $-779.0 $-665.8 $-585.6 $-439.1
Fiscal 'YTD -- $-747.1 -- -- -- --
  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 2.7% 0.4% 1.5% 0.6% 7.6%
  Individual Income Taxes 51 -0.3 6.1 2.7 0.3 10.5
  Corporate Income Taxes -- 1.7 -31.1 -0.8 -12.9 7.2
  Social Insurance Taxes 35 7.0 0.8 4.2 4.7 4.1
  Excise Taxes 3 12.9 13.3 -11.8 -3.3 5.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 6.6 3.2 3.3 4.5 5.3
  National Defense 16 8.4 5.3 6.1 0.7 -2.3
  Health 13 5.9 3.3 -1.9 6.2 17.8
  Medicare 14 6.4 -1.4 0.6 8.7 6.7
  Income Security 12 2.4 -1.6 -2.1 1.0 -0.9
  Social Security 24 5.6 4.5 3.1 3.2 4.4
  Veterans Benefits & Services 4 7.4 1.3 1.2 9.3 6.8
  Education, Training, Employment & Social Services 2 57.0 -34.0 31.6 -10.2 34.7
  Interest 8 16.4 23.6 9.1 7.8 -1.8
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