U.S. federal government posts FY 2015 deficit of $438.9bn

The U.S. federal government reported a monthly budget surplus of $91.1bn in September, modestly smaller than CBO projections and consensus expectations of $95.0bn. Receipts were up 4.1% y/y for the month, while spending grew 11.8% y/y.

CBO analysis notes that this growth in spending was inflated by the time-shifting of payments. Adjusting for calendar effects from Labor Day 2014, CBO estimates that the September 2015 budget surplus would have been $8bn larger than the prior year, says Barclays. 

Growth in budget receipts over this time horizon was driven primarily by payroll taxes, which were up 10%. Excise taxes rose by $3bn, as did remittances from the Federal Reserve. On the spending side, $8bn of the increase in outlays was driven by spending increases from the Department of Education related to student loans. Outlays for Social Security (4%), Medicare (4%), and Medicaid (9%) all rose from last year.

"September brings a close to fiscal year 2015. The budget deficit totaled $438.9bn, modestly higher than our prior forecast of $425bn. Looking ahead, we expect continued income gains to drive increases in tax receipts, which should lead to a further narrowing of the deficit", states Barclays.