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Economy in Brief

U.S. Budget Deficit Continues to Deepen
by Tom Moeller  August 10, 2016

So far in FY'16, the federal government's budget deficit totaled $513.7 billion, up 10.4% versus $465.5 billion in the first ten months of FY'15. That result was highlighted in today's U.S. Treasury Department report of a $112.8 billion budget deficit during July. A $129 billion deficit had been expected in the Action Economics Forecast Survey.

Overall revenues have been little changed so far in FY'16 versus the first ten months of FY'15. The total was pulled lower by a 12.8% y/y decline in corporate income tax payments, compared to 7.2% growth in 2015. Individual income taxes eased 0.4% y/y following last year's 10.5% rise. Social insurance contributions increased 4.3% y/y while excise taxes fell 2.9% y/y.

Government spending increased 1.7% y/y so far in FY'16 compared to 5.2% growth last year. Outlays on health programs gained 5.4% y/y and Social Security benefits rose 3.3% y/y. Veterans payments rose 0.4% y/y. To the downside, income security program payments fell 2.4% y/y with lower unemployment. National Defense spending fell 1.9% y/y, continuing the declines of the last several years. Medicare spending declined 1.3% y/y as July payments last year were elevated. Spending on Education, Training, Employment & Social Services eased 0.6% y/y. Interest payments increased 10.6% so far this fiscal year versus 2015.

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 July 2016 FY'15 FY'14 FY'13 FY'12
Budget Balance -- -$112.815 bil. -$438.9 bil. -$483.4 bil. -$680.2 bil. -$1,089.2 bil.
  As a percent of GDP -- 2.6% ytd 2.5% 2.8% 4.1% 6.8%
% of Total
Net Revenues (Fiscal YTD, Y/Y % Change) 100 0.2% 7.6% 8.9% 13.3% 6.4%
  Individual Income Taxes 47 -0.4 10.5 5.9 16.3 3.7
  Corporate Income Taxes 11 -12.8 7.2 17.3 12.9 33.8
  Social Insurance Taxes 33 4.3 4.1 8.0 12.1 3.2
  Excise Taxes 3 -2.9 5.3 11.1 6.3 9.2
Net Outlays  (Fiscal YTD, Y/Y % Change) 100 1.7 5.2 1.4 -2.4 -1.7
  National Defense 16 -1.9 -2.3 -4.7 -6.3 -3.9
  Health 13 5.4 17.8 14.3 3.3 -7.0
  Medicare 15 -1.3 6.7 2.8 5.5 -2.8
  Income Security 14 -2.4 -0.9 -4.3 -1.1 -9.1
  Social Security 24 3.3 4.4 4.5 5.2 5.8
  Veterans Benefits & Services 4 0.4 6.8 7.7 11.5 -2.0
  Education, Training, Employment & Social Services 3 -10.4 34.7 25.9 -21.9 -10.3
  Interest 6 10.6 -1.8 2.8 0.4 -3.0
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