Global| Mar 13 2008U.S. Budget Deficit Deeper Due to Revenue Shortfall & Spending Surge
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. government ran a budget deficit of $175.6B last month, quite a bit higher than last year's February deficit of $120B. For the first five months of FY08 the government ran a budget deficit of $263.3B versus a deficit of 162.2B [...]
The U.S. government ran a budget deficit of $175.6B last month, quite a bit higher than last year's February deficit of $120B.
For the first five months of FY08 the government ran a budget deficit of $263.3B versus a deficit of 162.2B during the first five months of FY07.
For the fiscal year to date, growth in federal receipts slowed to just 1.3%, down from 9.3% growth during the first five months of FY07. Lower stock prices and the weaker economy with its slower employment growth stalled growth in individual income tax receipts (44% of total receipts) at 0.7% from 12.8% last FYTD. Withheld income taxes grew 5.3%, half the rate of gain last year, but non-withheld taxes grew just 3.6% versus 20.9% growth during the five months of FY07.
Corporate income taxes (13% of total receipts) fell 4.8% due to lower corporate profits. During FY07 they rose 16.5% during the first five months. Unemployment insurance receipts fell 6.1% due to lower employment growth.
U.S. net outlays grew 10.2% early this fiscal year and that was nearly four times the growth early in FY07. Growth in defense spending (19% of total outlays) surged to 27.8% while Medicare expenditures (12% of outlays) surged 47.3%. Growth in social security spending (21% of outlays) held about steady at 4.8% but interest expense fell 1.5% as interest rates backed down a bit.
The Government's financial data is available in Haver's USECON database.
| US Government Finance | February | January | Y/Y | FY 2007 | FY 2006 | FY 2005 |
|---|---|---|---|---|---|---|
| Budget Balance | -$175.6B | $17.8B | -$120.0B (2/07) | -$162.0B | -$248.2B | -$318.7B |
| Net Revenues | $105.7B | $255.2B | -12.1% | 6.7% | 11.8% | 14.1% |
| Net Outlays | $281.3B | $237.4B | 17.1% | 2.8% | 7.4% | 7.6% |
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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