• Coronavirus relief drives spending.

• Revenues begin to rise with economy.

U.S. Treasury Department reported a federal budget deficit of $310.9 billion during February compared to a deficit of $235.3 billion one year earlier. The latest result raised the deficit for the first five months of this fiscal year to $1.047 trillion.

Federal government outlays have risen 24.7% y/y so far in FY'21. The increase was driven by a 125.0% surge in income security payments stemming from coronavirus relief, economic stimulus checks and a higher unemployment rate. Spending on health programs increased 2.6% y/y. Medicare payments declined 5.8% y/y and Social Security payments rose 4.1% y/y. Defense outlays rose 2.3% y/y so far in FY'21 but interest payments declined 14.6%.

Overall revenues have improved 5.1% y/y so far this fiscal year. Individual income tax payments rose 5.0% y/y so far in FY'21 due to improved economic growth while corporate tax payments also increased. Social insurance taxes rose 4.7% y/y, but the reduction in global economic trade lowered customs duties by 11.6% 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.