Global| Dec 12 2006U.S. Budget Deficit Continued to Shrink
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. federal government's budget deficit in November fell to $75.6B versus a deficit of $83.1B last November. That pulled the figure for the first two months of FY07 to $124.9B against $130.3B during last fiscal year's first two [...]
The U.S. federal government's budget deficit in November fell to $75.6B versus a deficit of $83.1B last November. That pulled the figure for the first two months of FY07 to $124.9B against $130.3B during last fiscal year's first two months. The Congressional Budget Office expects the FY 2007 deficit to total $286B, up slightly from last year's deficit of $247.7B.
As a percentage of GDP, the U.S. budget deficit fell last year to 1.9% from 2.6% in FY2005.
Net revenues grew 8.8% y/y during the first two months of FY07. Individual income tax receipts (44% of total receipts) grew 11.8% as withheld taxes rose 9.7% due to employment growth and non-withheld taxes (primarily on capital gains) surged 45.8%. Corporate income taxes (13% of total receipts) surged 21.5% as corporate profits grew. Estate & gift taxes fell 1.1% while higher employment levels raised social insurance & retirement receipts by 4.2%.
U.S. net outlays grew 4.7% during this fiscal year's first two months versus last year. Defense spending (19% of total outlays) grew 13.6% and Medicare expenditures (12% of outlays) surged 42.5%. Social security spending (21% of outlays) rose 6.0% but the recent bond market rally dropped the government's interest expense by 11.0% y/y.
Middle-Income Tax Rates: Trends and Prospects from the Federal Reserve Bank of Kansas City can be found here.
| US Government Finance | November | October | Y/Y | FY 2006 | FY 2005 | FY 2004 |
|---|---|---|---|---|---|---|
| Budget Balance | -$75.6B | -$49.3B | -$83.1B (11/05) |
-$247.7 | -$318.7B | -$412.7B |
| Net Revenues | $145.9B | $167.7B | 5.1% | 11.8% | 14.5% | 5.5% |
| Net Outlays | $221.5B | $217.0B | -0.2% | 7.4% | 7.8% | 6.2% |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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