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Treasury Budget: Sharply Wider, Tracking As Expected

March 10, 2022
Bottom Line: The budget deficit totaled nearly $217B in February after a surplus of almost $119B in January, primarily due to calendar effects. The fiscal year, which runs through September, is still on track for a deficit of $1.8T, notably less than 2021's tally of nearly $2.8T. With few new spending programs likely to pass in time to change this fiscal year, there is scope for tax receipts to come in a bit better than expected, bringing the deficit a touch less than the OMB's $1.8T projection. Looking beyond the fiscal year, the pace of federal outlays should continue to slow, while tax receipt growth trends higher, slowly bringing the trend rate of deficit spending to $1.25 - 1.75 Trillion.
The Treasury Budget DEFICIT totaled $216.6 billion in February, lower than the consensus estimate of a deficit of $214.0 billion. This compared with a deficit in February 2021 of $310.9 billion.
For the first 5 months of the fiscal year, the deficit totaled $475.6 billion, a decline of $571.1 billion from the first 5 months of the last fiscal year.
Receipts ROSE by 16.7% from its year-ago level, primarily because of an increase in corporate and individual income tax receipts.
Outlays FELL by 9.4% from it year-ago levels.  On a 12-month average basis, the trend in federal outlays is sharply lower.
Article by Contingent Macro Advisors