Wednesday, August 13, 2008

U.S. Budget Deficit Indicates Recession

The Age reports:

The United States federal budget deficit soared in July, pushed higher by stimulus payments and outlays to protect depositors at failed banks. The Treasury Department reported that the deficit for July totaled $US102.8 billion, nearly triple the $US36.4 billion deficit recorded in July 2007.

Lets take a deeper look...

The first chart below shows historical receipts, outlays and the deficit over twelve month rolling periods, while the second shows the year over year change in receipts and outlays over these periods, along with the difference between the two YoY changes.

Interestingly, this difference has turned negative in all of the four recessions (yes I'm calling this a recession!) since this data has been released...