US Posts Biggest Budget Surplus In History

What a difference a month makes.

Exactly one month ago, when the Treasury reported its latest monthly budget deficit, we noted that Federal spending surged in March, rising 7% from $392.8BN from a year prior to $420BN, the second highest monthly government outlay on record, and with tax receipts disappointing, it meant that the March budget deficit of $208.7 billion was 18% higher than $176.2BN deficit recorded last March, and was the biggest March budget deficit in US history.

Fast forward to today when anyone who took this one month and extrapolated it as an indication of US economic health got the shock of a lifetime, when the US posted its largest monthly budget surplus on record in April, and the highest Federal Government Receipts ever - at just over half a trillion dollars - which the Congressional Budget Office said reflected stronger economic activity over the past year.

In many ways, April was a mirror image of March: unlike March, Federal receipts in April soared to $510 billion, 12% or $54.8BN more than April 2017, and the highest Federal receipts not just for an April but any month in history (although of that surge, approximately $20BN was due to one additional day of collections in April 2018).

For those wondering if the culprit was tax repatriation, the answer is no: net corporate income taxes totaled $42.2BN in April and $120.8BN so far in fiscal 2018, 7 months into the year. The latter is down $39.2BN (24.5%) from the corporate taxes collected at this time last year; overall gross receipts were down 14% to $159.1BN while refunds up 53% to $38.3BN. as corporations become an increasingly less relevant source of government funding.

Meanwhile, on the spending side, outlays increased by a more modest 8.4% to $296 billion, the latest monthly budget statement  reported.

Combined, this meant that the monthly surplus was $214.3 billion, the highest since records started in 1968. While the number was modestly below the CBO's May 7 estimate of $218 billion, the number was well above the Wall Street consensus of $194BN, and well higher than the $182BN surplus in April of 2017.

While the federal government traditionally posts its biggest budget surplus in April when taxpayers file and pay their tax returns, this years was a blockbuster in every possible way: in a May 7 preview of the report, the CBO said that a stronger economic expansion and income growth added to federal revenue in April (there was no mention of taxes collected on cryptocurrency gains).

Overall, the budget deficit for the first seven months of the fiscal year widened to $385 billion, from $344 billion a year earlier, according to Treasury, although it was sharply lower than the $600 billion cumulative YTD deficit reported last month.

That said, don't expect the good times to continue indefinitely: Trump's tax cuts and spending increases are expected to push the budget deficit to $804 billion in the current fiscal year, from $665 billion in fiscal 2017, and surpass the $1 trillion-mark by 2020, according to the CBO. Others, such as Goldman, are confident that the US debt funding needs will surpass $1 trillion as soon as this year. The Trump administration has countered that tax cuts will pay for themselves through faster economic growth, and if April is any indication, it may be right.

Comments

Hal n back Juggernaut x2 Thu, 05/10/2018 - 17:23 Permalink

please do not forget that the budget just uses discretionary spending not mandatory and mandatory is 70% of whats spent.

Mandatory includes Soc Sec, Medicare, Medicaid, Prescription drugs and Obummercare, including the reimbursement for exchanges. Ain't nobody accountable for this 70%; LOL while crying.

Also for the bullshit factor, US debt decreased by 30 billion in April, not quite in concert with the large surplus.

So now after 7 months of the current fiscal year, the debt increase is just over 800 billion.

It also appears that tax revenues to GDP including inflation are at an all time high, which  probably means a lot of companies deferred income into the new year and took expenses last year so their taxable income will be higher in 2018, and I think the first tax est installment was 4/15/18.

April 2018 is an outlier. And I'd bet the repatriation is in there.

Does the strong econoy include declining auto sales and higher incentives, or the slowing housing market, or smartphone sales

Not to worry: Amazon, FB, GOOG , Netflix and Tesla are stronger than ever<cough>. MSFT and Adobe get to "rent" their software rather than selling for their growth.

Thank heaven for booze and now Marijuana sales to keep economy going.

 

 

 

In reply to by Juggernaut x2

Demon Slayer tmosley Fri, 05/11/2018 - 07:55 Permalink

These JACKASSES who commented above don't have a clue whether the numbers are right or not, maybe they're just Trump haters... ?? I personally think that deregulation and massive tax cuts are strong indicators of future growth and revenue...but I am only a Financial Analyst and only attended the USC School of Business for 5 years before e at researching, studying, and involved in multi million $$ finance for 20 years after that..so what do I know?

I would love to see the resumes of the MORONS that comment here on ZH. I bet you they are know nothing, mother's basement losers.

The comment sections of this site are disgustingly filled with anti Semite uninformed LOSERS.

I am not talking about you, but there are more morons that comment on this site than any other site on the Net...imho.

Peace.....

In reply to by tmosley

all-priced-in Hal n back Thu, 05/10/2018 - 18:02 Permalink

"please do not forget that the budget just uses discretionary spending not mandatory and mandatory is 70% of what's spent"

 

Nope --

 

All spending is included - look at the monthly numbers. 

 

Outlays between $300 and $400 billon - that includes social security and Medicare - and everything else.

 

Do you think the discretionary budget is ~~ $4 trillion a year?

 

Same thing with revenue.

 

 

 

 

In reply to by Hal n back

MoreFreedom BankSurfyMan Thu, 05/10/2018 - 17:27 Permalink

Certainly that individual taxes were due on 4/15 helped here.  Given the changes in the tax code, it's very possible that a lot of people didn't withhold as much tax as previously, leading to bigger checks to the treasury with their tax returns. 

But I do agree, that we likely won't have budget surpluses for any other month for the rest of the year.   Congress will continue to spend all they can, and Trump won't be able to do anything about it.  Especially since most of the GOP (i.e. the RINOs that are about 85% of our elected GOP representatives) are against cutting spending, regardless about what they say they support.   Just look at their voting record: it's always for big increases in government spending, higher than any increase in the GDP so it's increasing the burden on workers.

In reply to by BankSurfyMan

GoingBig Thu, 05/10/2018 - 17:21 Permalink

OMG - trying to identify budgets on a monthly schedule is a fools game. Even year over year, the changes to collection dates, etc, cause huge perturbations. This is nothing but mental masturbation. 

truthalwayswinsout Thu, 05/10/2018 - 17:21 Permalink

It is really easy to balance a budget and also get good government. But it is impossible to do when everyone in government is in business for themselves. Lie, Cheat and Steal is the order of the day.

BGO Thu, 05/10/2018 - 17:25 Permalink

The Treasury can report whatever statistics it wants, it can create any graphs it wants, it can fabricate any financial predictions it wants.

I don't believe a single word they say.

No exceptions.

Don Sunset Thu, 05/10/2018 - 17:38 Permalink

The GOP is spending more than the DEMs did.  I won't vote GOP any more.  I won't vote at all for political positions held by people.  I will vote on propositions etc.

The DEMs won't get my vote.  Nobody will.

 

338 Thu, 05/10/2018 - 17:41 Permalink

NEWSFLASH!!!

 

USFEDGOV stole more money from it's tax cattle than before it did, and it will continue until.......

 

Forever.

 

TAXATION IS THEFT.

 

Sean

karenm Thu, 05/10/2018 - 18:00 Permalink

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!

Good one ZH! But April Fool's was last month!