Tax receipts are up and spending growth is slowing as the government's deficit is coming down. The Treasury deficit in February looks big, at $203.5 billion, but February, when receipts are low, is typically a high deficit month and the latest total is slightly under the $208 billion average of the last six years.
More telling is the year-to-date reading for the government's fiscal year. Six months into the year the deficit is down a convincing 15 percent -- and when excluding special calendar factors, the deficit is down an even more convincing 19 percent. Income tax receipts, for both individual and corporate taxes, are up 18 percent so far this fiscal year. On the spending side, defense shows a 4 percent decline.
The budget deficit is one of this year's biggest stories, one made bigger by the unfolding impact of sequestration which looks to cut the spending side even further.
Market Consensus before announcement
The U.S. Treasury monthly budget report showed a very rare surplus in January of $2.9 billion but this was due to special calendar factors excluding which the government showed a deficit of $13 billion in the month. Still this was very low. Looking ahead, the month of February typically shows a deficit for the month. Over the past 10 years, the average deficit for the month of February has been $159.1 billion and $208.9 billion over the past 5 years. The February 2012 deficit came in at $231.7 billion.