U.S. deficit streak at 20 months

By Chavon Sutton, staff reporter


NEW YORK (CNNMoney.com) -- The government posted its 20th consecutive monthly deficit in May, according to data released Thursday by the Treasury Department.

The $135.9 billion shortfall brought the deficit for the first eight months of the fiscal year to $935.6 billion. That's down nearly 6% from $992.1 billion in the same period a year earlier, and below the $189.7 billion shortfall last May.

"The report seems consistent with (last week's) jobs report," said Bob Bixby, executive director for the Concord Coalition, a federal budget watchdog group. "We're in a holding pattern, keeping our head above water and waiting to see which way it's going to break." The government announced last week that 431,000 jobs were created in May, but only 41,000 of them in the private sector.

Receipts in May totaled $146.8 billion, up from $117.2 billion a year earlier, and outlays were $282.7 billion, down from $306.9 billion.

For the eight-month period, government outlays continued to outpace receipts, with the government collecting 8% less in individual income taxes - its largest revenue source - compared to the same period a year earlier. This decline was slightly offset by revenue from corporations, which jumped 17% above the prior year period.

Although there were slight shifts in the report, Bixby said his analysis found "nothing surprising."

The last time the government reported a surplus was just before the financial crisis in September 2008, when it posted a $45.7 billion gain. The Treasury Department's forecasts a deficit of $1.56 trillion by the end of the fiscal year, up from a record $1.41 trillion in fiscal 2009.

April marked only the third time in 30 years that the U.S. government spent more than it collected in revenue in that month, a period when Americans file their tax returns.

The magnitude of the measures used to stave off a complete economic meltdown led President Obama to sign legislation that increased the government's debt cap to a record high $14.3 trillion earlier this year. U.S. debt subject to that limit totaled $12.99 trillion as of Thursday.

In the wake of the debt crisis in Europe, the U.S. government has come under scrutiny, as many fear that it could share in a similar fate as debt-laden European countries such as Greece, Portugal and Spain. But Bixby says that it is no longer an immediate concern.

Still, the European crisis has stimulated demand for U.S. bonds as investors flee to save-haven investments. Bixby said this could prove troublesome for the United States, which has yet to address its debt issues, as interest rates inevitably rise above historic lows.

"Our problem isn't as acute as what they're facing in Europe, but it's the same disease," said Bixby. "They're just further along." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,098.45 18.88 0.11%
Nasdaq 4,580.27 22.58 0.50%
S&P 500 2,003.37 6.63 0.33%
Treasuries 2.34 0.01 0.39%
Data as of 4:41am ET
Company Price Change % Change
Bank of America Corp... 16.09 0.08 0.50%
Apple Inc 102.50 0.25 0.24%
Intel Corp 34.92 0.27 0.78%
Facebook Inc 74.82 0.96 1.31%
General Electric Co 25.98 -0.03 -0.12%
Data as of Aug 29

Sections

The deal would value Vice at $2.5 billion. The online media company would also create content for the cable network, delivering a wider audience. More

Gas prices are falling to nearly $3 a gallon in some parts of South Carolina, and that will soon be common in much of the country. More

Netflix told the FCC that its speed on the Comcast network became so slow that customers began dropping their service. More

The Coolest Cooler is the most successful Kickstarter campaign in the site's history, raising $13.3 million from over 62,000 backers. More

Five CNNMoney readers share stories about saving that you can learn from: What they would do differently if they had another chance. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.