Global| Feb 10 2021U.S. Government Budget Deficit Deepens in January
by:Tom Moeller
|in:Economy in Brief
Summary
• Deficit share of GDP continues to balloon. • Outlay surge driven by coronavirus aid. • Higher unemployment reduces personal tax receipts. The U.S. Treasury Department reported that the federal budget deficit of $162.8 billion during [...]
• Deficit share of GDP continues to balloon.
• Outlay surge driven by coronavirus aid.
• Higher unemployment reduces personal tax receipts.
The U.S. Treasury Department reported that the federal budget deficit of $162.8 billion during January compared to a deficit of $32.6 billion one year earlier. The latest result pulled the deficit for the first four months of this fiscal year to $735.7 billion, roughly one-third of GDP.
Federal government outlays have risen 22.7% y/y so far in FY'21. The increase was driven by a 178.7% surge in income security payments stemming from coronavirus relief, economic stimulus checks and a higher unemployment rate. Spending on health programs increased 28.7% y/y. Medicare payments grew 9.7% y/y and Social Security payments rose 4.2% y/y. Defense outlays rose 3.3% y/y so far in FY'21 but interest payments declined 14.2%.
Overall revenues have improved 0.8% y/y so far this fiscal year. The recession has lowered individual income tax payments by 3.8% y/y so far in FY'21 but corporate tax payments have improved. Social insurance taxes rose 5.9% y/y, but the reduction in global economic trade lowered customs duties by 14.3% y/y.
Haver's data on Federal Government outlays are contained in USECON; detailed data can be found in the GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.
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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