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 1/11/08 For Dec 2007 | ||||||||||||
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Highlights
The Treasury posted a slightly lower than expected surplus of $48.3 billion in December, up from a $42.0 billion surplus in the year-ago month but not enough to keep the fiscal year to date deficit from widening, now 31 percent deeper than a year ago. Special factors gave a boost to November's surplus as a corporate tax date increased receipts and a transfer payment date held down payments at the expense of November. Individual income taxes are running 9.1 percent ahead of last year though corporate taxes, which are a smaller category, are down 4.4 percent. Outlays are up 8.8 percent.
Improvement in the budget deficit may be a memory given the outlook for slowing economic growth and the squeezing of tax receipts. The trade report for November, released this morning, showed a big rise in that deficit, the result of high oil prices and the nation's continued appetite for imports. Wednesday's Treasury International Capital report will offer the next missing piece: whether foreign investment in U.S. securities, which has been up and down since August, can sustain the nation's deficits.
The U.S. Treasury monthly budget report showed a November deficit of $98.2 billion versus a November 2006 deficit of $73.0 billion. But the Congressional Budget Office said $17 billion of transfer payments, due to a calendar quirk, were pulled into November from December. Looking ahead, the month of December typically shows a modest surplus for the month. Over the past 10 years, the average surplus for December has been $13.9 billion.
Treasury Statement Consensus Forecast for December 07: +$50.0 billion (surplus)
Range: +$36.0 billion to +$64.0 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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