U.S. Federal Government Budget Deficit Expands in First Half of FY’25
by:Tom Moeller
|in:Economy in Brief
Summary
- Federal receipt growth slows.
- Outlay growth surges.
The U.S. Treasury Department reported a U.S. government budget deficit of $1.307 trillion for the first six months of FY 2025, up 22.7% from a $1.065 trillion deficit for the half of FY’24. For March alone, the government ran a budget deficit of $160.5 billion, which compared to a deficit of $236.6 billion twelve months earlier. The Action Economics Forecast Survey expected a $103.0 billion deficit in March.
Overall revenues in the first six months of FY’25 increased 3.3% y/y compared to a 6.8% y/y rise in the first six months of last year. Individual income tax receipts rose 5.0% y/y compared to last year’s 5.8% y/y gain. The level of corporate tax receipts fell 14.6% y/y so far this year after a 35.2% y/y rise in the first six months of FY’24. Social insurance revenues increased 3.9% y/y after a 5.6% y/y rise in the first half of FY’24 and excise taxes rose 11.9% y/y so far in FY’25 compared to a 4.8% gain early last year. Customs duties rose 15.6% y/y in the first six months of FY’25 after an 8.6% y/y decline in the first six months of last fiscal year.
Federal government outlays grew 9.7% y/y so far in FY’25 versus a 3.3% rise in the first half of FY’24. Defense spending rose 7.6% y/y versus a 6.3% y/y rise in the first six months of last fiscal year. Social Security outlays rose 8.5% y/y in the first six months of FY’25 versus a 9.1% gain last year. Interest payments rose 13.9% y/y so far in FY’25 after a 42.5% rise in the first half of last fiscal year. Health program spending rose 6.7% y/y after falling 0.5% in the first half of FY’24 while Medicare payments surged 20.0% y/y versus a 3.5% y/y decline early last year. Income security outlays rose 7.8% y/y early this year compared to a 19.4% y/y decline in the first six 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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