• May budget deficit falls short of expectations.

• Tax receipts improve with economic growth.

• Income-security outlays continue to climb.

The U.S. Treasury Department reported a federal budget deficit of $2.064 trillion for the first eight months of FY 2021. This compares to a $1.880 trillion deficit over the same period last year. For May alone, the deficit totaled $132.0 billion compared to the May '20 deficit of $398.8 billion. Expectations had been for a $176 billion May deficit in the Action Economics Forecast Survey.

Overall revenues increased 29.1% y/y so far this fiscal year. Individual income tax payments jumped 48.6% y/y in FY'21 due to improved economic growth while corporate tax payments strengthened 121.0% y/y. Social insurance taxes rose 3.6% y/y and customs duties improved 6.6% y/y in FY'21.

Federal government outlays have risen 19.8% y/y so far in FY'21. The increase includes a 62.1% surge in income security payments due to COVID-19 support. Spending on health programs grew 7.8% y/y so far this fiscal year. Defense outlays rose 3.9% y/y so far in FY'21 while Social Security payments increased 3.7% y/y. Medicare payments declined 14.5% y/y, due to calendar year differences, while interest payments fell 8.0% y/y so far in FY'21.

Haver's data on Federal Government outlays are contained in USECON;