Global| Sep 14 2015U.S. Budget Deficit Halves in August Due to Calendar Quirks, Trending Toward Eight-Year Low
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. Treasury Department reported a $64.4 billion budget deficit during August, half the $128.7 billion deficit during August of 2014. An $84.0 billion deficit had been expected in the Action Economics Forecast Survey. Because [...]
The U.S. Treasury Department reported a $64.4 billion budget deficit during August, half the $128.7 billion deficit during August of 2014. An $84.0 billion deficit had been expected in the Action Economics Forecast Survey. Because August 1 occurred on a Saturday this year, the government indicated that roughly $42 billion in benefit payments were pulled into July. For the first eleven months of Fiscal Year 2015, the budget deficit eased to $530.0 billion, off 10% from the $589.2 billion deficit in the first eleven months of FY 2014. Budget deficits of $426 billion in FY 2015, then $414 billion in FY 2016 were called for in last month's updated projections from the Congressional Budget Office (CBO), the lowest deficits since 2007.
Continuing economic expansion left the gain in fiscal year-to-date revenues fairly steady at 8.0% after last year's 8.9% advance. So far this fiscal year, growth in individual income taxes strengthened to 11.8% y/y, roughly double last year's increase. Growth in corporate income taxes, however, halved to 8.6% y/y. Improved labor markets left social insurance taxes & contributions growing a lesser 3.8% y/y while excise taxes rose just 2.3% y/y.
Government spending growth so far this fiscal year of 4.8% y/y compared to a 1.4% advance during all of FY 2014. Quickened growth reflected a 26.8% y/y rise in spending for Education, Training, Employment & Social Services. Growth in outlays on health programs strengthened to 19.5% y/y with the Patient Protection and Affordable Care Act. Medicare spending growth ramped up to 7.2% y/y though Social Security payments growth was steady at 4.4% y/y. Veterans benefits & services growth eased to 2.3% y/y. These gains were countered by a 3.4% y/y drop in defense outlays which extended the declines of the prior three years. Income security payments fell 2.7% y/y with the lower unemployment rate while interest outlays declined 2.1% y/y.
An Update to the Budget and Economic Outlook: 2015 to 2025 from the Congressional Budget Office can be found here.
Haver's data on Federal Government outlays and receipts are contained in USECON. Considerable detail is given in the separate GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.
| US Government Finance | August | FY'14 | FY'13 | FY'12 | FY'11 | |
|---|---|---|---|---|---|---|
| Budget Balance | -- | $-64.4 bil. | $483.4 bil. | $-680.2 bil. | $-1,089.2 bil. | $-1,296.8 bil. |
| As a percent of GDP | -- | -- | 2.8 | 4.1 | 6.8 | 8.4 |
| % of Total | FY'15 YTD | |||||
| Net Revenues (Y/Y % Change) | 100 | 8.0% | 8.9% | 13.3% | 6.4% | 6.5% |
| Individual Income Taxes | 47 | 11.8 | 5.9 | 16.3 | 3.7 | 21.5 |
| Corporate Income Taxes | 10 | 8.6 | 17.3 | 12.9 | 33.8 | -5.4 |
| Social Insurance Taxes | 34 | 3.8 | 8.0 | 12.1 | 3.2 | -5.3 |
| Excise Taxes | 3 | 2.3 | 11.1 | 6.3 | 9.2 | 8.2 |
| Net Outlays (Y/Y % Change) | 100 | 4.8 | 1.4 | -2.4 | -1.7 | 4.1 |
| National Defense | 18 | -3.4 | -4.7 | -6.3 | -3.9 | 1.7 |
| Health | 10 | 19.5 | 14.2 | 3.1 | -7.0 | 1.0 |
| Medicare | 14 | 7.2 | 2.8 | 5.5 | -2.8 | 7.5 |
| Income Security | 16 | -2.7 | -4.3 | -1.1 | -9.1 | -4.1 |
| Social Security | 24 | 4.4 | 4.6 | 5.2 | 5.8 | 3.4 |
| Veterans Benefits & Services | 4 | 2.3 | 7.7 | 11.5 | -2.0 | 17.3 |
| Education, Training, Employment & Social Services | 3 | 26.8 | 25.9 | -21.9 | -10.3 | -20.6 |
| Interest | 6 | -2.1 | 3.0 | 0.4 | -3.0 | 15.8 |
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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