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Highlights
The government's declining deficit is a standout factor for the nation's economy, evidenced by a surplus -- not deficit -- in the month of December of $53.2 billion. Three months into the government's fiscal year, the deficit is down 41 percent from this time last year. Receipts, boosted by a stronger economy and higher tax rates, are up a year-on-year 8.0 percent so far this fiscal year with outlays, that include big declines for net interest and defense spending, down 7.8 percent. A lower deficit is of course a positive for the government's credit standing, though it reduces stimulus for the economy. | |||||||||||||
Market Consensus before announcement
The U.S. Treasury monthly budget report showed the deficit dropping to $135.2 billion in November versus $172.1 billion in November last year. Two months into the government's fiscal year, the deficit is down 22 percent, benefiting from last year's payroll tax hike along with declines in spending including spending on defense which was down 10 percent during the first two months of fiscal 2014. Looking ahead, the month of December typically shows a deficit. Over the past 10 years, the average deficit for December has been $22.7 billion and $61.7 billion over the past 5 years. The December 2012 deficit came in at $1.2 billion.
Source: Bloomberg
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Monday, 13 January 2014
The Federal budget for December, posts a $53.2 billion surplus
