The U.S. Treasury releases a monthly account of the surplus or deficit of the federal government. Changes in the budget balance of the annual fiscal year (which begins in October) are followed as an indicator of budgetary trends and the thrust of fiscal policy. Why Investors Care
| Released on 5/10/07 For Apr 2007 | ||||||||||||
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Highlights
Boosted by surging tax receipts, the Treasury's surplus in April proved higher than expected at $177.7 billion. The Treasury's deficit so far this fiscal year is well under a year ago, at $80.8 billion vs. 184.1 billion. Solid profit job growth has boosted individual tax receipts by a year-to-date 17.3 percent year-to-date, while solid profit growth has boosted corporate tax receipts by 15.2 percent. Total receipts are up 11.2 percent against a year-to-date increase of only 3.2 percent for outlays.
The easing in the nation's fiscal deficit is welcome news for sure, but how long it lasts is another question given the slowdown in economic growth. Data this morning showed a higher-than-expected trade imbalance, a reminder that the nation still depends on foreign investment to fund its debt. Treasury International Capital, which tracks foreign investment, will be released on Tuesday.
The U.S. Treasury monthly budget report showed a slight improvement in the federal deficit in March from February - dipping to a deficit of $96.3 billion from a shortfall of $120.0 billion in February. However, the March deficit was notably higher than for March 2006 - which came in at $85.3 billion. The latest deficit was swollen by higher tax refunds and timing of miscellaneous outlays including foreign aid to Egypt and Israel. Nevertheless, the fiscal year-to-date deficit is well under this time last year, at $258.4 billion vs. $302.9 billion. But continued improvement is uncertain, given the slowing in U.S. economic growth. The month of April typically shows a sizeable surplus for the month. Over the past 10 years, the average surplus for the month of April has been $99.4 billion with the surplus for April 2006 up to $118.8 billion.
Treasury Statement Consensus Forecast for April 07: +$150.0 billion (surplus)
Range: +$100.0 billion to +$172.0 billion.
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The federal budget balance is not seasonally adjusted. Consequently, it is useful to compare the current month's budget deficit or surplus to the same month for a couple of years. Some months are known to have large surpluses because quarterly estimated tax payments are received by the government. |
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