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Economy in Brief

U.S. Budget Deepened in July
by Tom Moeller August 13, 2007

The U.S. federal government in July posted a deficit of $36.3B versus a surplus of $27.5B during June and a deficit of $33.2B last July.

The monthly figure was near Consensus expectations for a deficit of $35B. Analysts' forecasts of the Federal budget benefit from access to the Government's Daily Treasury Statement, the data for which is available in Haver's DAILY database.

The administration's latest Midsession Review of the Budget can be found here

The July budget figures pulled the deficit for the ten months of FY07 to $157.3B, down from $239.6B during the first ten months of FY06.

Net revenues grew 8.8% y/y during the first ten months of FY07. Individual income tax receipts (44% of total receipts) grew 9.0% as withheld taxes grew 9.7% during the first ten months but non-withheld taxes rose a stronger 13.6% due to estimated capital gains. Corporate income taxes (13% of total receipts) recovered a strong 10.7% y/y but estate & gift taxes fell 7.0%. Higher employment levels raised employment contributions by 4.4%.

U.S. net outlays grew 2.9% during this fiscal year's first ten months. Defense spending (19% of total outlays) grew 6.3% and Medicare expenditures (12% of outlays) surged by14.4%. Social security spending (21% of outlays) rose 5.7% but the government's interest expense rose by 5.1% y/y. Holding back the overall gain in expenditures were large declines in spending on energy and agriculture as well as a 3.0% decline in spending on international affairs and a 7.9% drop in spending on natural resources & environment.

US Government Finance   July June Y/Y FYTD 2007 FY 2006 FY 2004
Budget Balance $-36.3B $27.5B $-33.2B
-$247.7 -$318.7B -$412.7B
Net Revenues $170.4B $276.5B 6.7% 7.5% 11.8% 14.6%
Net Outlays $206.8B $249.0B 7.2% 2.5% 7.4% 7.8%
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