WASHINGTON, July 13 (Reuters) - The U.S. government posted a larger-than-expected budget surplus in June, propped up by higher quarterly business tax receipts, a government report released on Tuesday showed.
In the Treasury Department's monthly budget statement, June income outpaced spending by $19.14 billion, slightly less than the government's June 2003 surplus of $21.23 billion.
"What we are seeing is the impact of a good economy, the impact of extraordinarily strong corporate profits, and likely the impact of more people being caught in the alternative minimum tax," Drew Matus, financial markets economist at Lehman Brothers in New York, said in response to the report.
"Surprisingly strong receipts are really helping out a great deal here. There is no reason to suspect, given the employment growth we have seen, that this trend will change any time soon," he said.
The June result exceeded Wall Street forecasts of a $16.50 billion surplus, as well as a $16 billion surplus projection from the nonpartisan Congressional Budget Office.
Both income and expenditures rose in the month as the government collected more taxes and spent more on defense and Medicare than in June 2003.
Corporate income tax inflows grew 38 percent in June, when quarterly tax statements are normally filed, compared to June 2003. Individual tax receipts were nearly 9 percent higher.
On the spending side, defense expenditures rose almost 20 percent in June compared to the year-ago month, Medicare spending jumped 37 percent, and Social Security outflows rose a more modest 2 percent.
The U.S. remains on track for a second straight record annual budget deficit, on the heels of a $374.23 billion shortfall in 2003.
For the first nine months of the fiscal year, which began Oct. 1, the U.S. has an accumulated federal deficit of $326.62 billion, well ahead of its $269.71 billion shortfall at the same point last year.
June's result is only the second monthly surplus this budget year, compared to four monthly overflows in the first nine months of fiscal 2003, according to Treasury data.
Still, the higher-than-expected surplus is likely to ease analyst worries about the size of the 2004 annual shortfall.
Earlier this year, the White House had forecast a $521 billion annual budget gap. A much lower revised forecast is expected to be issued sometime after mid-July.
Now this is good to see....
Budget Surplus
