The U.S. posted a record December budget surplus as higher payroll taxes, payments from Fannie Mae and Freddie Mac, and a declining unemployment rate helped improve the government’s finances.
Revenue exceeded spending by $53 billion last month, compared with a $1.2 billion deficit in December 2012, the Treasury Department said today in Washington. The median estimate in a Bloomberg survey of 29 economists was for a $44 billion surplus, the same as the Congressional Budget Office’s prediction.
The 1.2 percentage-points drop in the nation’s jobless rate to 6.7% in 2013 was the steepest calendar-year decline since 1983. The strengthening economy and swelling tax revenue cut the country’s deficit as a share of gross domestic product by more than half to $680 billion in the fiscal year ended Sept. 30 from a record $1.42 trillion in 2009.
“We continue to see economic conditions improve, which is being reflected in the budget deficits continuing to narrow,” said Michael Brown, an economist at Wells Fargo Securities LLC in Charlotte, N.C.
The yield on the benchmark 10-year Treasury note fell three basis points to 2.82% Monday, touching the lowest level in a month. The report showed revenue increased to $283 billion last month from $269.5 billion in December 2012. Spending totaled $230 billion compared with $271 billion a year earlier, it showed.
The deficit totaled $173.6 billion in the first three months of fiscal 2014, compared with a $293.3 billion shortfall from October through December 2012, according to the report.
Payments to the Treasury from Fannie Mae and Freddie Mac were about $34 billion more last month than they were a year earlier, according to the report.
Fannie Mae and Freddie Mac have taken $187.5 billion in U.S. aid since they were taken into conservatorship in 2008. They’ve returned $185.2 billion, which is counted as a return on the nearly 80% stakes the government holds, not as repayment.