Global| Jan 27 2010U.S. Federal Budget Deficit Projections Falling From Lofty Heights
by:Tom Moeller
|in:Economy in Brief
Summary
The latest estimates of the federal government's budget deficit were released yesterday by the Congressional Budget Office. Though this fiscal year's deficit estimate of $1.3 trillion was down slightly from 2009 due to the end of the [...]
The
latest estimates of the federal government's budget deficit were
released yesterday by the Congressional Budget Office. Though this
fiscal year's deficit estimate of $1.3 trillion was down slightly from
2009 due to the end of the latest recession, it remained near a record.
As a percentage of GDP, the 9.2% deficit was near its peak and triple
the 2008 figure.
With the end of the recession revenues are expected to rise 3.3% after the huge decline last year. Thereafter, as the economic recovery matures revenue growth is expected in the double-digits for both 2011 and 2012. Subpar growth in employment is expected, however, to hold revenue growth below recoveries. A subpar recovery in corporate profits also would contribute to low federal revenue growth.
This year the projected deficit would lift the national debt to $13.3 trillion. At 91% of GDP that is the highest level since 1950.
The CBO's latest budget projections are available in Haver's USECON database.
Budget Outlook 2010 from the Congressional Budget Office can be found here.
| Ongressional Budget Office Projections | 2009 | 2010 | 2011 | 2012 | 2013 |
|---|---|---|---|---|---|
| Federal Budget Deficit ($ Billion) | 1,414 | 1,349 | 980 | 650 | 539 |
| % of GDP | 10.0 | 9.2 | 6.5 | 4.1 | 3.2 |
| Revenues | -16.6 | 3.3 | 22.8 | 11.0 | 8.6 |
| Outlays | 17.9 | 0.2 | 3.6 | -1.0 | 4.0 |
| Underlying Assumptions | |||||
| Nominal GDP | -1.4 | 2.5 | 2.7 | 4.9 | 6.0 |
| Real GDP | -2.9 | 1.6 | 1.8 | 3.9 | 4.9 |
| Consumer Price Index | -0.3 | 2.4 | 1.4 | 1.2 | 1.1 |
| Unemployment Rate | 9.3 | 10.1 | 9.5 | 8.0 | 6.3 |
| 10-Year Treasury Note Rate | 3.2 | 3.6 | 3.9 | 4.2 | 4.5 |
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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