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Wednesday, October 30, 2013

Report: Budget Deficit Declines Sharply in Fiscal 2013

by Calculated Risk on 10/30/2013 08:49:00 PM

• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 335 thousand from 350 thousand last week.

• At 9:45 AM, the Chicago Purchasing Managers Index for October. The consensus is for a decrease to 55.0, down from 55.7 in September.

The Treasury released the Fiscal 2013 Final Monthly Treasury Statement. As expected, the Government ran a $75 billion surplus in September (end of fiscal year), and the budget deficit in 2013 declined sharply to 4.1% of GDP from 6.8% of GDP in fiscal 2012.

US Federal Government Budget Surplus DeficitClick on graph for larger image.

This graph shows the actual (purple) budget deficit each year as a percent of GDP, and an estimate for the next nine years based on estimates from the CBO.  NOTE: This includes updated GDP estimates from the BEA. 

The deficit should decline further over the next couple of years (I think the CBO is pessimistic on 2014).

After 2015, the deficit will start to increase again according to the CBO, but there is no urgent need to reduce the deficit over the next few years.