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Economy in Brief

U.S. Government Budget Deficit Narrows in November
by Tom Moeller  December 10, 2020

• Reduction due to calendar shifts.

• Revenue decline led by a drop in personal tax receipts.

• Outlay surge driven by higher unemployment benefit payments.

The U.S. Treasury Department reported that the federal budget deficit declined to $145.3 billion during November compared to $208.8 billion twelve months earlier. The Action Economics Survey anticipated a $200.0 billion deficit for last month.

Federal government outlays rose 8.9% y/y two months into the new fiscal year compared to a 47.3% rise during all of FY 2020. The increase was driven by a 66.7% surge in income security payments so far in FY21 stemming from coronavirus relief payments and a higher unemployment rate. Spending on health care programs increased 18.0% y/y. Social security payments grew a lessened 4.2% y/y but defense outlays eased 0.1% y/y in FY21. Medicare payments declined 15.0% this fiscal year, although the decline largely reflected a weekend start date for the month. Interest payments eased 4.9% so far this fiscal year.

Overall revenues declined 2.9% y/y so far this fiscal year. The recession has lowered individual income tax payments by 12.8% y/y and corporate tax receipts by 16.1% so far in FY21. Growth in social insurance payments rose to 8.1% y/y, and the reduction in global economic trade lowered customs duties by 17.5% y/y.

Haver's data on Federal Government outlays are contained in USECON; detailed data can be found in the GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.

United States Government Finance Nov FY'20 FY'19 FY'18 FY'17
Budget Balance (Billion $) -- $-145.3 $-3,132 $-984.16 $-779.00 $-665.80
Fiscal YTD -- -429.3 -- -- -- --
  As a percent of GDP -- 19.4% 16.1% 4.6% 3.8% 3.5%
% of Total (FY 2020)
Net Revenues (Fiscal Year YTD 2021, Y/Y % Change) 100 -2.9% -1.2% 4.0% 0.4% 1.5%
  Individual Income Taxes 47 -12.8 -6.4 2.0 6.1 2.7
  Corporate Income Taxes 6 -16.1 -8.0 12.5 -31.1 -0.8
  Social Insurance Taxes 38 8.1 5.4 6.2 0.8 4.2
  Customs Duties 2 -17.5 -3.2 71.4 19.4 -0.8
Net Outlays  (Fiscal Year YTD 2021, Y/Y % Change) 100 8.9 47.3 8.2 3.2 3.3
  National Defense 11 -0.1 5.6 8.8 0.1 6.1
  Health 11 18.0 28.0 6.1 9.8 -1.9
  Medicare 12 -15.0 19.2 10.6 -1.4 0.6
  Income Security 19 66.7 145.0 3.9 -1.6 -2.1
  Social Security 17 4.2 4.9 5.7 4.5 3.1
  Veterans Benefits & Services 3 -13.4 9.3 11.8 1.3 1.2
  Education, Training, Employment & Social Services 4 9.3 75.5 43.8 -34.0 31.6
  Interest 5 -4.9 -8.2 15.7 23.6 9.1
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