Tags: Federal | Budget | Surplus | Estimates

Federal Budget Surplus Falls Short of Estimates

Monday, 12 May 2014 02:41 PM

The U.S. posted a smaller budget surplus in April than economists projected, as spending increased at more than twice the pace of tax receipts.

Revenue exceeded spending by $106.9 billion last month, compared with a $112.9 billion surplus a year before, the Treasury Department said Monday in Washington. The median estimate in a Bloomberg survey of 24 economists was for a $114 billion surplus.

So far this fiscal year, which began Oct. 1, the country is running a budget shortfall that’s about 37 percent smaller than it was a year earlier. Still, the economy nearly stalled in the first quarter, while spending rose last month on defense and entitlement programs.

“We’ve kind of seen the best numbers we are going to see,” Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, said before the report. The degree of improvement in the federal budget over the past year or so may not continue unless economic growth accelerates, he said.

Monday’s Treasury report showed revenue increased 1.8 percent to $414.2 billion last month from $406.7 billion in April 2013. Spending totaled $307.4 billion, a 4.6 percent increase from a year earlier, the figures showed.

Gross domestic product grew at a 0.1 percent annual rate from January through March, compared with a 2.6 percent gain in the prior quarter, figures from the Commerce Department showed last month.

Corporate Taxes

During the first seven months of the 2014 fiscal year, individual tax receipts gained 3.5 percent, while corporate tax revenue jumped about 15 percent, Monday’s Treasury data showed.

The deficit so far this fiscal year totaled $306.4 billion, compared with a $487.6 billion shortfall from October 2012 through April 2013, according to Monday’s figures.

In the short term, a shrinking budget gap is giving the government scope to scale back some debt auctions and enabling the Treasury to pay down $78 billion in net marketable debt from April through June, the biggest quarterly reduction in seven years.

The fiscal improvement is “definitely positive,” Gennadiy Goldberg, a U.S. strategist at TD Securities USA LLC in New York, said before the report was released. “The economy has continued to improve, and growth has shifted up a gear, at least in late 2013, so there is a reason to be optimistic that the receipts will continue to improve.”

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The federal government posted a smaller budget surplus in April than economists projected, as spending increased at more than twice the pace of tax receipts.
Federal, Budget, Surplus, Estimates
Monday, 12 May 2014 02:41 PM
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