• Deficit share of GDP continues to balloon.

• Outlay surge driven by coronavirus aid.

• Higher unemployment reduces personal tax receipts.

The U.S. Treasury Department reported that the federal budget deficit of $162.8 billion during January compared to a deficit of $32.6 billion one year earlier. The latest result pulled the deficit for the first four months of this fiscal year to $735.7 billion, roughly one-third of GDP.

Federal government outlays have risen 22.7% y/y so far in FY'21. The increase was driven by a 178.7% surge in income security payments stemming from coronavirus relief, economic stimulus checks and a higher unemployment rate. Spending on health programs increased 28.7% y/y. Medicare payments grew 9.7% y/y and Social Security payments rose 4.2% y/y. Defense outlays rose 3.3% y/y so far in FY'21 but interest payments declined 14.2%.

Overall revenues have improved 0.8% y/y so far this fiscal year. The recession has lowered individual income tax payments by 3.8% y/y so far in FY'21 but corporate tax payments have improved. Social insurance taxes rose 5.9% y/y, but the reduction in global economic trade lowered customs duties by 14.3% 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.