May 12 (Bloomberg) -- The U.S. posted a smaller budget surplus in April than economists projected, as spending increased at more than twice the pace of tax receipts.
Revenue exceeded spending by $106.9 billion last month, compared with a $112.9 billion surplus a year before, the Treasury Department said today in Washington. The median estimate in a Bloomberg survey of 24 economists was for a $114 billion surplus.
So far this fiscal year, which began Oct. 1, the country is running a budget shortfall that’s about 37 percent smaller than it was a year earlier and was the narrowest at the seven-month mark since 2008. Still, the economy nearly stalled in the January-March quarter, while outlays rose last month on defense and entitlement programs.
“There was a little more growth in spending than would have been anticipated,” said Gennadiy Goldberg, a U.S. strategist at TD Securities USA LLC in New York. “We have had the economy starting to recover at a fairly decent pace, obviously excluding the first-quarter slowdown, but given that the outlook is positive” for growth this year, we can expect continued lower deficits, he said.
Treasuries fell. The U.S. 30-year bond yield rose four basis points, or 0.04 percentage point, to 3.50 percent at 2:38 p.m. in New York, based on Bloomberg Bond Trader prices.
A faster pace of hiring and soaring corporate profits are lifting tax receipts and helping shrink a deficit this year that’s projected to be the smallest as a share of the economy since 2007.
The nation’s budget gap will narrow to $492 billion in the 12 months to Sept. 30, compared with $680 billion in 2013 and about a third of its 2009 record level of $1.4 trillion, the Congressional Budget Office said on April 14.
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 and lower than the 3.1 percent average of the past 40 years.
Today’s Treasury report showed revenue increased 1.8 percent to $414.2 billion last month from $406.7 billion in April 2013. Spending totaled $307.4 billion, a 4.6 percent increase from a year earlier, the figures showed.
Gross domestic product grew at a 0.1 percent annual rate from January through March, compared with a 2.6 percent gain in the prior quarter, figures from the Commerce Department showed last month.
Employers added 288,000 workers to payrolls in April, the biggest gain in two years, as the jobless rate fell to 6.3 percent, the lowest level since the collapse of Lehman Brothers Holdings Inc. in September 2008.
During the first seven months of the 2014 fiscal year, individual tax receipts gained 3.5 percent, while corporate tax revenue jumped about 15 percent, today’s Treasury data showed.
The deficit so far this fiscal year totaled $306.4 billion, compared with a $487.6 billion shortfall from October 2012 through April 2013, according to today’s figures.
In the short term, a shrinking budget gap is giving the government scope to scale back some debt auctions and enabling the Treasury to pay down $78 billion in net marketable debt from April through June, the biggest quarterly reduction in seven years.
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