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Treasury Budget: Surplus in January, But Trend Towards Larger Deficit Continued

February 12, 2018
Bottom Line: The Treasury surplus in January was less than expected and entirely the result of calendar effects. The trend remains towards modestly larger deficits with the current fiscal year (which started in October) running $17B larger than at this time last year. Tax receipts have started growing again modestly on a trend basis, but the pace of federal outlay growth remains faster.

The Treasury Budget SURPLUS totaled $49.2 billion in January, lower than the consensus estimate of a surplus of $51.0 billion. This compared with a surplus in January 2017 of $51.3 billion.

For the first 4 months of the fiscal year, the deficit has totaled $175.7 billion, an increase of $17.1 billion from the first 4 months of the last fiscal year.

Receipts ROSE by 4.9% from its year ago level, primarily because of increase in corporate and individual income tax receipts. On a 12-month average basis, receipts are now increasing modestly, after steadily rising since January 2010.

Outlays ROSE by 6.5% from its year ago level, partly because of the shift in the timing of certain payments. On a 12-month average basis, the trend in federal outlays is moderately higher. After several years of declining unemployment benefit and military outlays, upticks in health and medicare continue to drive outlays higher.