Global| Oct 15 2018U.S. Government Budget Deficit Deepens to the Largest in Six Years
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. Treasury Department reported that during FY'18, the federal government ran a $779.0 billion budget versus a $665.8 billion deficit in FY'17. It was the largest deficit since 2012 and amounted to 3.9% of GDP, up from 3.5% in [...]
The U.S. Treasury Department reported that during FY'18, the federal government ran a $779.0 billion budget versus a $665.8 billion deficit in FY'17. It was the largest deficit since 2012 and amounted to 3.9% of GDP, up from 3.5% in FY'17. For the month of September the federal government actually ran a $119.1 billion surplus, which made little dent in the annual figure. A $78 billion September surplus had been expected in the Action Economics Forecast Survey.
Net revenues increased 0.4% y/y in FY'18 after a 1.5% rise in FY'17. The gain was held back by a roughly one-third decline in corporate income tax receipts, due to the recently enacted tax cut, following last fiscal year's 0.8% decline. Individual income taxes increased 6.1% y/y as employment continued to improve, compared to a 2.7% rise during all of FY'17. Social insurance receipts rose 0.8% y/y following last year's 4.2% rise, and excise taxes improved 14.3% y/y after last year's 11.8% decline.
Government spending increased 3.2% y/y in FY'18, about the same as FY'17. National defense spending rose 5.3% y/y after a 6.1% rise. Health insurance spending increased 3.3% following a 1.9% shortfall. Medicare outlays declined 1.4% y/y following a negligible increase in FY'17. Growth in income security payments declined 1.6% y/y with rising job levels. Social Security payments rose an accelerated 4.5% y/y. Interest payments increased by roughly one-quarter y/y with the larger deficit.
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.
| United States Government Finance | FY'18 | FY'17 | FY'16 | FY'15 | FY'14 | |
|---|---|---|---|---|---|---|
| Budget Balance (Billions) | -- | $-779.0 | $-665.8 | $-585.6 | $-439.1 | $-483.4 |
| As a percent of GDP | -- | 3.9% | 3.5% | 3.2% | 2.5% | 2.8% |
| % of Total | ||||||
| Net Revenues (Fiscal Year YTD 2018, Y/Y % Change) | 100 | 0.4 | 1.5% | 0.6% | 7.6% | 8.9% |
| Individual Income Taxes | 51 | 6.1 | 2.7 | 0.3 | 10.5 | 5.9 |
| Corporate Income Taxes | -- | -31.1 | -0.8 | -12.9 | 7.2 | 17.3 |
| Social Insurance Taxes | 35 | 0.8 | 4.2 | 4.7 | 4.1 | 8.0 |
| Excise Taxes | 3 | 14.3 | -11.8 | -3.3 | 5.3 | 11.1 |
| Net Outlays (Fiscal Year 2017 YTD, Y/Y % Change) | 100 | 3.2 | 3.3 | 4.5 | 5.3 | 1.4 |
| National Defense | 16 | 5.3 | 6.1 | 0.7 | -2.3 | -4.7 |
| Health | 13 | 3.3 | -1.9 | 6.2 | 17.8 | 14.3 |
| Medicare | 14 | -1.4 | 0.6 | 8.7 | 6.7 | 2.8 |
| Income Security | 12 | -1.6 | -2.1 | 1.0 | -0.9 | -4.3 |
| Social Security | 24 | 4.5 | 3.1 | 3.2 | 4.4 | 4.5 |
| Veterans Benefits & Services | 4 | 1.3 | 1.2 | 9.3 | 6.8 | 7.7 |
| Education, Training, Employment & Social Services | 2 | -34.0 | 31.6 | -10.2 | 34.7 | 25.9 |
| Interest | 8 | 23.6 | 9.1 | 7.8 | -1.8 | 2.8 |
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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