Economy Watch: Federal Government Records Surplus; Retailers Do Well in December
- Jan 14, 2014
The U.S. Department of the Treasury reported on Monday in its most recent monthly statement that the United States took in a surplus of $53.22 billion during the last month of 2013, which was more than expected, boosted by almost $40 billion in payments to the government from Fannie Mae and Freddie Mac. In December 2012, the deficit was $1.2 billion.
December 2013’s surplus was also the largest one ever recorded for the month, as well as being the first December for which federal revenues outpaced expenditures since 2007, at the beginning of the recession. The federal government ran a deficit for the fourth quarter of calendar 2013 (which is the first quarter of fiscal 2014) of $173.6 billion, which is down 41 percent from the same period in 2012, Treasury said.
The federal deficit as a percentage of GDP has been steadily shrinking in the face of an improving economy and the sequester. During fiscal 2013, which ended on Sept. 30 of that year, the federal government took in $680 billion less than it spent, or about 4.1 percent of GDP, which was a 37 percent drop in the deficit from the previous year. During fiscal 2012, the deficit was $1.087 trillion, or 6.8 percent of GDP. During the worst of the recession – fiscal 2009 — when revenue was vastly down and spending went up to meet the crisis, the deficit topped out at more than 10 percent of GDP.
Retailers Do Well in December
Ahead of official retail sales numbers for December, which will be released on Tuesday, the International Council of Shopping Centers reported late last week that chain-store comparable sales were up 3.4 percent in December 2013, compared with the same month a year earlier. That was an improvement from November’s year-over-year increase of 2.1 percent, and meant that chain-store comp sales were up 3 percent for the November-December holiday shopping season.
“While some retailers undoubtedly faced a tough holiday season with more promotional activity, bouts of adverse weather and a cautious consumer, overall industry sales met expectations and managed to outpace last year’s growth rate,” Michael Niemira, ICSC chief economist, said in a statement. Looking ahead to the end of the fiscal year for most retailers, ICSC Research forecasts January monthly comp-store sales will increase by between 3 percent and 3.5 percent over last year, just slightly under the December increase.
Wall Street headed down a slippery slope on Monday, with the Dow Jones Industrial Average losing 179.11 points, or 1.09 percent. The S&P 500 dropped 1.26 percent and the Nasdaq declined 1.47 percent.