US: Federal deficit at larger-than-expected levels - Wells Fargo

Analysts from Wells Fargo, see the federal deficit for the current fiscal year going to larger-than-expected levels. They estimate a deficit of $700 billion for FY 2017; the previous year was $585 billion.

Key Quotes: 

“Steady spending growth and soft tax collections are driving the federal deficit for fiscal year (FY) 2017 to larger-than-expected levels. We look for the federal budget deficit to total $700 billion for FY 2017”

“The federal budget deficit was slightly larger than anticipated in June at $90.2 billion.”

“On the revenue side, federal tax collections remain relatively soft. Corporate income tax receipts are essentially flat, while individual income collections are up 2.4 percent fiscal year-todate.”

“Relative to the size of the economy, the budget deficit has turned over after several years of cyclical improvement. 

“On the spending side, net outlays are up 5.7 percent fiscal year-to-date, with growth in net interest and mandatory programs.”