U.S. Federal Government Deficit Resumes in May After Tax Inflow in April
by:Tom Moeller
|in:Economy in Brief
Summary
- Deficit deepens in first eight months of FY 2025.
- Outlay growth well outpaces revenue growth so far this year.
The U.S. Treasury Department reported a U.S. government budget deficit of $316.0 billion during May, which compared to a deficit of $347.1 billion twelve months earlier. The Action Economics Forecast Survey expected a $322.0 billion deficit in May. During the first eight months of the current fiscal year, however, the government ran a budget deficit of $1.365 trillion versus a deficit of $1.202 trillion in the first eight months of FY’24.
Overall revenues in the first eight months of FY’25 increased 5.9% y/y compared to a 9.8% y/y rise in the first eight months of last year. Individual income tax receipts rose 7.2% y/y compared to last year’s 10.1% y/y gain. The level of corporate tax receipts fell 4.2% y/y so far this year after a 32.8% y/y rise in the first eight months of FY’24. Social insurance revenues increased 3.5% y/y after a 6.0% y/y rise in the first eight months of FY’24, while excise taxes rose 18.6% y/y so far in FY’25 compared to a 10.7% gain in the first eight months of last fiscal year. Customs duties rose 65.1% y/y in the first eight months of FY’25 after an 8.6% y/y decline last fiscal year.
Federal government outlays grew 7.9% y/y so far in FY’25 versus an 8.0% y/y rise in the first eight months of FY’24. Defense spending rose 6.4% y/y versus an 8.5% y/y rise in the first eight months of last fiscal year. Social Security outlays rose 8.3% y/y in the first eight months of FY’25 versus an 8.4% increase in the first eight months of last fiscal year. Interest payments rose 10.6% y/y so far in FY’25 after a 41.7% rise in the first eight months of last fiscal year. Health program spending rose 6.8% y/y after easing 0.1% early in FY’24 while Medicare payments rose 15.2% y/y versus a 21.9% y/y rise last year. Income security outlays rose 8.7% y/y early this year compared to a 15.1% y/y decline in the first eight months of FY’24.
Haver's data on Federal Government receipts & outlays are contained in USECON. The expectations figure is 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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