Shortfall widens to $747 billion for fiscal year to date, Treasury says
The numbers: The federal government’s June budget deficit narrowed to $8 billion, the Treasury Department reported Thursday, down nearly 90% from the same month a year ago.
The much-lower monthly figure was affected by shifts in the timing of certain federal payments, as well as receipts. Without those shifts the deficit would have been $55 billion, wider than June 2018’s $30 billion shortfall.
What happened: The government spent $342 billion in June, a decrease of 12% from last year. Receipts were $334 billion, up 6% from the same month a year ago.
In June spending fell on military programs, Medicare and veterans’ programs, among other areas. But interest payments on the public debt rose, as did outlays on transportation and Medicaid.
Receipts of individual withheld and payroll taxes climbed 2%, while corporate tax receipts rose by 32%. Customs duties increased by 61%, as President Donald Trump has imposed tariffs on billions of dollars in Chinese goods.
The big picture: The budget deficit for the fiscal year to date is widening compared to the first nine months of fiscal 2018, as spending has climbed 7% and receipts have grown by just 3%. Through June, the budget gap totaled $747 billion. Both receipts and outlays are at records for the year to date, a senior Treasury official said. The government’s budget year runs from October through September.
The Congressional Budget Office is forecasting a full-year deficit of nearly $900 billion, with both spending and revenues projected to rise but the gap between them persisting.
Financial markets, meanwhile, show no signs of worry about the expanding deficits, as the yield on the 10-year Treasury TMUBMUSD10Y, -0.42% has fallen to 2.12% from as high as 3.23% in November. On Thursday, the Dow Jones Industrial Average DJIA, +0.85% crossed 27,000 for the first time.