Global| Aug 12 2014U.S. Budget Deficit's Decline Is Near Expectations
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Government posted a $94.6 billion budget deficit during July of FY 2014, and roughly matched expectations in the Action Economics Forecast Survey. For the first ten months of the current fiscal year, the government ran a [...]
The Federal Government posted a $94.6 billion budget deficit during July of FY 2014, and roughly matched expectations in the Action Economics Forecast Survey. For the first ten months of the current fiscal year, the government ran a $460.5 billion deficit compared to $607.4 billion last year. It was the smallest budget deficit during the first ten months of any fiscal year since 2008. For FY 2014, the Office of Management & Budget projects the budget deficit will total $583 billion then $525 billion in FY 2015.
Net revenues for this fiscal year-to-date increased 8.0% y/y with the firmer economy. Corporate income taxes increased 14.4% y/y while the improved labor market raised social insurance taxes by 9.0% y/y. Individual income taxes increased an improved 4.9% y/y but excise taxes declined 1.0% y/y.
The smaller budget deficit in FY'14 also reflects an easier 1.2% y/y increase in net outlays versus last year. Outlay growth was held back by a 5.5% y/y reduction in defense outlays and a 4.4% y/y decline in income security outlays. To the upside, spending growth was boosted this year by an accelerated 13.5% y/y jump in health outlays, which include health services, research & training, and an 8.1% y/y rise in veterans benefits. Also increasing were social security outlays which gained a stable 4.6% y/y while Medicare spending grew a firming 1.8% y/y. Reflecting the recent rise in interest rates, net interest payments rose 3.1% y/y.
Haver's basic data on Federal Government outlays and receipts, and summary presentations of the Budget from both OMB and CBO are contained in USECON. Considerable detail is given in the separate GOVFIN database.
| US Government Finance | July | FY'13 | FY'12 | FY'11 | FY'10 | |
|---|---|---|---|---|---|---|
| Budget Balance | -- | $-94.6 bil. | $-680.3 bil. | $-1,089.2 bil. | $-1,296.8 bil. | $-1,294.2 bil. |
| As a percent of GDP | -- | -- | 4.1 | 6.8 | 8.4 | 8.8 |
| % of Total | YTD FY'14 | |||||
| Net Revenues (Y/Y % Change) | 100 | 8.0% | 13.3% | 6.4% | 6.5% | 2.7% |
| Individual Income Taxes | 47 | 4.9 | 16.3 | 3.7 | 21.5 | -1.8 |
| Corporate Income Taxes | 10 | 14.4 | 12.9 | 33.8 | -5.4 | 38.5 |
| Social Insurance Taxes | 34 | 9.0 | 12.1 | 3.2 | -5.3 | -2.9 |
| Excise Taxes | 3 | -1.0 | 6.3 | 9.2 | 8.2 | 7.1 |
| Net Outlays (Y/Y % Change) | 100 | 1.2 | -2.4 | -1.7 | 4.1 | -1.8 |
| National Defense | 18 | -5.5 | -6.3 | -3.9 | 1.7 | 4.6 |
| Health | 10 | 13.5 | 3.1 | -7.0 | 1.0 | 10.4 |
| Medicare | 14 | 1.8 | 5.5 | -2.8 | 7.5 | 5.0 |
| Income Security | 16 | -4.4 | -1.1 | -9.1 | -4.1 | 16.7 |
| Social Security | 24 | 4.6 | 5.2 | 5.8 | 3.4 | 3.5 |
| Veterans Benefits | 4 | 8.1 | 11.5 | -2.0 | 17.3 | 13.6 |
| Interest | 6 | 3.1 | 0.4 | -3.0 | 15.8 | 2.9 |
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.
