Nov 14, 2019

U.S. budget gap hits $134.5 billion, up 34% in a year

Photo: Mark Wilson/Getty Images

The U.S. budget gap grew to $134.5 billion in October, up roughly $34% from the same time last year, Bloomberg reports.

The big picture: The federal government ended the 2019 fiscal year with the biggest deficit — $984.4 billion — we've seen in seven years. The widening gap comes as a result of continued spending increases and dwindling receipts. The deficit marks the largest October shortfall since 2015. Income also dropped by 2.8% last month from a year earlier.

  • Federal Reserve Chairman Jerome Powell warned Congress on Wednesday the "federal budget is on an unsustainable path" and suggested that if not addressed, the deficit could hinder Congress' ability to fend off future recession.
  • The Congressional Budget Office estimated an October deficit of $133 billion as of last week.
  • The Treasury predicts the federal deficit will top $1 trillion during the 2020 and 2021 fiscal years. The new fiscal year begins each October.

Reality check: The trillion-dollar deficit projections stand in stark contrast to President Trump’s 2016 campaign promises that he would eliminate deficits with spending cuts and growth in revenues from a stronger economy, writes AP.

Go deeper:

Go deeper

Federal deficit sees 12% increase in two months, topping $342 billion

U.S. Treasury Secretary Steve Mnuchin. Photo: Chip Somodevilla/Getty Images

The federal deficit hit $342 billion for the first two months of fiscal year 2020, according to new Congressional Budget Office estimates.

The big picture: The annual deficit is forecast to average $1.2 trillion a year between 2020 and 2029, about 4.4% to 4.8% of gross domestic product, according to the CBO. Meanwhile, the national debt exceeded $23 trillion in November.

Go deeperArrowDec 10, 2019

The trade war is kind of working

Illustration: Lazaro Gamio/Axios

U.S. manufacturers and small businesses have been hit hard by the trade war, but recent data shows that China is really suffering.

Driving the news: China's total exports fell for the 12th straight month in November, dropping 1.1% from a year ago, and exports to the U.S. have fallen more than 20%, according to China’s customs administration.

Capital markets are eyeing the world's soaring debt

Illustration: Aïda Amer/Axios

The world's debt is rising to unprecedented levels. While politicians and the general public have seemingly lost interest, capital markets are beginning to show signs of strain, financial experts say.

Driving the news: Global debt surged by $7.5 trillion in the first half of the year, hitting a new record of more than $250 trillion, according to data released Thursday from the Institute of International Finance.

Go deeperArrowNov 15, 2019