• Budget deficit exceeds expectations.

• Coronavirus-related outlays balloon.

• Individual tax receipts strengthen with economic improvement.

The U.S. Treasury Department reported a federal budget deficit of $1.932 trillion for the first seven months of FY 2021. This compares to a $1.481 trillion deficit over the same period last year. For April alone, the deficit totaled $225.6 billion compared to expectations in the Action Economics Forecast Survey for a $130 billion deficit. One year ago, the first round of COVID-19 stimulus checks to individuals produced an April '20 deficit of $738.0 billion.

Federal government outlays have risen 22.5% y/y so far in FY'21. The increase includes a 95.3% surge in income security payments due to coronavirus relief payments, economic stimulus checks and outlays related to a higher unemployment rate. Spending on health programs grew 13.0% y/y so far this fiscal year. Social Security payments increased 3.8% y/y and defense outlays rose 6.6% y/y so far in FY'21. Medicare payments fell 9.5% y/y, due to calendar year differences, and interest payments fell 13.6% y/y so far in FY'21.

Overall revenues have increased 16.1% y/y so far this fiscal year. Individual income tax payments jumped 20.1% y/y in FY'21 due to improved economic growth while corporate tax payments demonstrated even more strength. Social insurance taxes rose 3.6% y/y, but the reduction in global economic trade lowered growth in customs duties to 1.1% y/y in FY'21.

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.