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Economy in Brief

U.S. Government Budget Deficit Continues to Deepen
by Tom Moeller  August 12, 2019

The U.S. Treasury Department reported that the federal government ran a $119.7 billion budget deficit during July compared to a $76.9 billion shortfall posted one year earlier. A $117.5 billion deficit had been expected in the Action Economics Forecast Survey. During the first ten months of FY'19, the budget deficit deepened to $866.8 billion compared to a deficit of $684.0 billion during the first ten months of FY'18.

Growth in tax receipts continued to improve. Net revenues rose 3.4% y/y so far this fiscal year compared to a 1.0% y/y gain during in first ten months of FY'18. Slowing were personal income tax receipts where growth slipped to 1.0% y/y so far in FY'19, compared to a 7.8% y/y rise in the first ten months of FY'18. Growth from other sources picked up the slack. Corporate tax receipts increased 3.2% y/y so far this year after a 28.5% ten-month y/y drop last year. Social insurance receipts rose 6.7% y/y following little change y/y ten months into FY'18. Excise taxes rose by 11.7% y/y after last year's 8.5% y/y rise ten month rise.

Spending growth quickened this year compared to last. Government outlays increased 8.0% y/y so far in FY'19, nearly double last year's 10-month y/y rise. National defense spending strengthened 9.5% y/y following a 0.4% y/y rise in the first ten months last year. Medicare outlays rose by 12.6% y/y following a 3.5% ten-month y/y increase last year. Growth in income security payments increased 4.5% y/y so far in FY'19 after little-change in the first ten months of FY'18. Social Security payments gained 5.7% y/y after rising 4.5% y/y in the first ten months of FY'18. Offsetting these accelerations, spending growth on health programs decelerated to 6.4% y/y, after a 10.4% y/y gain in the first ten months of last fiscal year. Growth in interest payments slowed to 14.4% y/y from 20.4% 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 July FY'18 FY'17 FY'16 FY'15
Budget Balance (Billions) -- $-119.7 $-779.0 $-665.8 $-585.6 $-439.1
Fiscal 'YTD -- $-866.8 -- -- -- --
  As a percent of GDP -- -- 3.9% 3.5% 3.2% 2.5%
% of Total
Net Revenues (Fiscal Year YTD 2019, Y/Y Change) 100 3.4% 0.4% 1.5% 0.6% 7.6%
  Individual Income Taxes 51 1.0 6.1 2.7 0.3 10.5
  Corporate Income Taxes -- 3.2 -31.1 -0.8 -12.9 7.2
  Social Insurance Taxes 35 6.7 0.8 4.2 4.7 4.1
  Excise Taxes 3 11.7 13.3 -11.8 -3.3 5.3
Net Outlays  (Fiscal Year YTD 2019, Y/Y % Change) 100 8.0 3.2 3.3 4.5 5.3
  National Defense 16 9.5 5.3 6.1 0.7 -2.3
  Health 13 6.4 3.3 -1.9 6.2 17.8
  Medicare 14 12.6 -1.4 0.6 8.7 6.7
  Income Security 12 4.5 -1.6 -2.1 1.0 -0.9
  Social Security 24 5.7 4.5 3.1 3.2 4.4
  Veterans Benefits & Services 4 12.9 1.3 1.2 9.3 6.8
  Education, Training, Employment & Social Services 2 53.6 -34.0 31.6 -10.2 34.7
  Interest 8 14.4 23.6 9.1 7.8 -1.8
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