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Economy in Brief

U.S. Government Budget Deficit Shrinks in December
by Tom Moeller  January 12, 2022

• Monthly deficit is smallest in two years.

• Revenues surge with stronger employment.

• Medicare & Social Security outlays decline Y/Y.

The U.S. Treasury Department reported a federal budget deficit of $21.3 billion during December 2021 compared to a $143.6 billion deficit in December 2020. Receipts increased 73.1% (40.6% y/y) from November while outlays rose 7.5% (3.7% y/y). Consensus expectations in the Action Economics Forecast Survey had been for a $27 billion surplus in December. So far in FY'22, the deficit has totaled $377.7 billion versus $572.9 billion in the first three months of last year.

Overall revenues have increased 30.9% y/y so far in FY'22. Individual income tax receipts increased 54.3% y/y as employment continued to strengthen. Corporate tax payments rose 43.3% as business earnings improved. Social insurance taxes rose 5.8% y/y in December and customs duties improved by nearly one-third y/y.

Federal government outlays have increased 3.9% year-to-date in FY'22. Strengthening 61.0% y/y were education, training, employment & social services outlays. Spending on health programs rose 20.5% y/y in the first three months of FY'22. Income security payments rose 10.2% y/y while veteran benefits rose 8.9% y/y. Defense outlays have grown 1.2% so far this fiscal year. To the downside, Social Security outlays dropped 4.9% y/y so far in FY'22 and Medicare outlays fell 1.5% y/y. Interest payments have increased 16.6% so far in FY'22.

Haver's data on Federal Government outlays are contained in USECON; The expectations figure is the AS1REPNA database.

United States Government Finance Dec FY'21 FY'20 FY'19 FY'18
Budget Balance (Billion $) -- -$21.3 -$2,772.18 -$3,131.92 -$984.39 -$779.00
Fiscal YTD -- -377.7 -- -- -- --
% of Total (FY 2021)
Net Revenues (Fiscal Year YTD 2022, Y/Y % Change) 100 30.9 18.3 -1.2 4.0 0.4
  Individual Income Taxes 51 54.3 27.1 -6.4 2.0 6.1
  Corporate Income Taxes 9 43.3 75.5 -8.0 12.5 -31.1
  Social Insurance Taxes 32 5.8 0.3 5.4 6.2 0.8
  Customs Duties 2 30.9 16.7 -3.2 71.4 19.4
Net Outlays  (Fiscal Year YTD 2022, Y/Y % Change) 100 3.9 4.1 47.3 8.2 3.2
  National Defense 11 1.2 4.0 5.6 8.8 0.1
  Health 12 20.5 6.4 28.1 6.1 9.8
  Medicare 10 -1.5 -10.3 19.2 10.6 -1.4
  Income Security 24 10.2 30.6 145.0 3.9 -1.6
  Social Security 17 -4.9 3.5 4.9 5.7 4.5
  Veterans Benefits & Services 3 8.9 7.1 9.3 11.9 1.3
  Education, Training, Employment & Social Services 4 61.0 25.3 75.5 43.7 -34.0
  Interest 5 16.6 2.2 -8.2 15.7 23.6
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