A sharp rise in the US budget deficit!
The US budget deficit jumped last November by $57 billion, on an annual basis, to reach $249 billion, setting a record for the month, in light of the decline in revenues and a sharp rise in spending on education, health care and interest on public debt, according to what was announced by the US Treasury.
Revenues fell 10% last November, or $29 billion, compared to their level a year ago, to reach $252 billion, while expenses rose 6%, or $28 billion, to $501 billion, setting a record for the month as well.
This revenue decline led to a 4% drop in at-source tax collection for individuals, a 64% rise in tax refunds for individuals, and a 98% drop in Federal Reserve revenue.
“The higher spending was led by a $14 billion increase in the cost of the Medicare program and an $11 billion increase in education expenditures as a result of changes to direct tuition loan programs and public service loan forgiveness,” a Treasury official said.
Observers believe that “the course of inflation in the United States in 2023 may carry more surprises in its sleeve, after a year in which consumers suffered the greatest damage to the cost of living in 40 years, which led to a sharp increase in interest rates by the Federal Reserve and raised Investors concerns”.
It’s likely that the consumer price index for the month of November, which will be released soon, is the last report for 2022, although inflation is moderating, but it is proceeding at a rate three times the pace before the epidemic.
Excluding food and energy, the Consumer Price Index is expected to rise by 0.3% for the second month, and 6.1% from a year ago.
According to Anita Markowska, chief financial economist at Jefferies, which said: “The report will reinforce the narrative that inflation has peaked, and there are still at least some hurdles that we will go through in the next few months in terms of inflation expectations”.
