Deficit falls as economy, jobs boost revenue

WASHINGTON — The U.S. posted a $130 billion budget deficit in May and the smallest shortfall for the first eight months of a fiscal year since 2008, as a stronger economy and rising employment bolster revenue.

The deficit last month was about $9 billion less than the $139 billion shortfall in May 2013, the Treasury Department said Wednesday in Washington. The median estimate in a Bloomberg survey of 20 economists called for a $130.5 billion gap.

“U.S. budget dynamics have been on a much better trajectory as of late, with both cuts to spending and higher revenues helping to push fiscal year 2014 deficit projections substantially lower,” said Gennadiy Goldberg, U.S. strategist at TD Securities USA in New York. “The revenue component is indicative of a gradually recovering economy.”

For the fiscal year, which began Oct. 1, the government is running a budget deficit 30 percent smaller than it was a year earlier and the narrowest at the eight-month mark since 2008. Revenues for that period are 7 percent higher than a year earlier and outlays are 2 percent lower.

In the fiscal year through May, the government posted a $436.4 billion deficit compared with a $626.3 billion shortfall in the same period a year earlier, the figures showed.S

Wednesday’s Treasury report showed revenue increased to $200 billion last month from $197 billion in May 2013. Spending totaled $330 billion, a 2 percent decline from the same month a year earlier, the figures showed.

The Congressional Budget Office in April projected that the federal deficit will decline to $492 billion this fiscal year, the smallest in six years, from $680 billion in 2013 and a record $1.4 trillion when President Barack Obama took office in January 2009.

Next year, the shortfall will decline further, to $469 billion, the nonpartisan agency said. The 2014 deficit will be 2.8 percent of gross domestic product, according to CBO, compared with 4.1 percent of GDP in 2013.

The U.S. labor market has improved this year. Payrolls pushed past their U.S. pre-recession peak for the first time in May, the fourth consecutive month employment increased by more than 200,000, the first time that’s happened since early 2000.

More in Herald Business Journal

Tulalips break ground on new Quil Ceda Creek Casino Hotel

A 150-room hotel was added to what is now a $140 million complex expected to open in spring 2019.

For modern women, 98-year-old rejection letters still sting

In a stark new video, female Boeing engineers break the silence about past inopportunity.

Angel of the Winds pays $3.4M for Everett arena naming rights

The casino replaces Xfinity as the lead sponsor for the publicly owned downtown Everett events center.

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Providence Hospital in Everett at sunset Monday night. Officials Providence St. Joseph Health Ascension Health reportedly are discussing a merger that would create a chain of hospitals, including Providence Regional Medical Center Everett, plus clinics and medical care centers in 26 states spanning both coasts. (Kevin Clark / The Daily Herald)
Merger would make Providence part of health care behemoth

Providence St. Joseph Health and Ascension Health are said to be talking. Swedish would also be affected.

Bombardier promotes its C Series airliner as American made

It says more than half its all-new jet is made in US factories with final assembly near Montreal.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Justice Department confirms criminal probe in Uber case

A former Uber executive is accused of stealing self-driving car technology from Google.

Trudeau snubs Boeing, unveils plan to buy used Aussie jets

Trudeau will be assessing the impact fighter jet contracts have on his country’s economy.

Most Read