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Economy in Brief

U.S. Government Budget Deficit Continues to Increase Y/Y
by Tom Moeller  June 12, 2018

The U.S. Treasury Department reported that the federal government ran a $146.8 billion budget deficit during May 2018. That compared to a $88.4 billion deficit during May 2017. A $119.5 billion had been expected in the Action Economics Forecast Survey. During the first eight months of fiscal year 2018, the government's budget deficit totaled $532.2 billion, up 22.9% versus $432.9 billion in the first eight months of FY'17.

Net revenues rose 2.6% y/y so far in FY'18 after a 1.5% increase during all of last fiscal year. Individual income taxes increased 9.0% y/y following a 2.7% rise during all of last fiscal year. The increase in social insurance receipts eased to 2.1% y/y from 4.2% last year, and excise taxes improved 11.5% y/y and reversed last year's 11.8% decline. The rate of decline in corporate income taxes quickened to -25.4% y/y with the corporate income tax cut, after taxes fell 0.8% during all of last fiscal year.

Government spending increased 5.9% y/y so far in FY'18 compared to 3.3% growth during all of FY'17. National defense spending rose 5.2% y/y after slight increases during the last two fiscal years. Health insurance spending grew a steady 4.1% y/y, while Medicare outlays increased an accelerated 2.5% y/y. With the lower unemployment rate, income security payments slipped 0.6% y/y after their 2.1% FY'17 decline. Social Security payments rose an accelerated 4.3% y/y. Interest payments gained 17.5% y/y so far in FY'18 after increasing 9.2% last fiscal year.

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 May 2018 FY'17 FY'16 FY'15 FY'14 FY'13
Budget Balance (Billions) -- $-146.8 $-665.7 $-585.6 $-439.1 $-483.4 $-680.2
  As a percent of GDP -- -- 3.5% 3.2% 2.5% 2.8% 4.1%
% of Total
Net Revenues (Fiscal Year YTD 2018, Y/Y % Change) 100 2.6% 1.5% 0.6% 7.6% 8.9% 13.3%
  Individual Income Taxes 47 9.0 2.7 0.3 10.5 5.9 16.3
  Corporate Income Taxes 9 -25.4 -0.8 -12.9 7.2 17.3 12.9
  Social Insurance Taxes 34 2.1 4.2 4.7 4.1 8.0 12.1
  Excise Taxes 3 11.5 -11.8 -3.3 5.3 11.1 6.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 5.9 3.3 4.5 5.3 1.4 -2.4
  National Defense 15 5.2 0.8 0.7 -2.3 -4.7 -6.3
  Health 15 4.1 4.1 6.2 17.8 14.3 3.3
  Medicare 15 2.5 0.6 8.7 6.7 2.8 5.5
  Income Security 13 -0.6 -2.1 1.0 -0.9 -4.3 -1.1
  Social Security 24 4.3 3.1 3.2 4.4 4.5 5.2
  Veterans Benefits & Services 4 6.4 1.2 9.3 6.8 7.7 11.5
  Education, Training, Employment & Social Services 4 6.5 31.6 -10.2 34.7 25.9 -21.9
  Interest 7 17.5 9.2 7.8 -1.8 2.8 0.4
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