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U.S. budget deficit narrows in October from year ago
November 13, 2013 / 7:06 PM / 4 years ago

U.S. budget deficit narrows in October from year ago

A flock of birds passes by overhead as the sun rises over the U.S. Capitol dome in Washington, October 18, 2013. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) - The U.S. budget deficit narrowed more than expected in October, aided by an improved economy and an austerity push that has cut spending and raised taxes, data showed on Wednesday.

The figures are the latest to show a dramatic improvement in public finances that could reduce pressure on lawmakers to reduce the nation’s swollen debt load.

The federal government spent $92 billion more last month than it received, taking in about 70 cents for every dollar in outlays. Economists polled by Reuters expected the government to run $104 billion into the red last month, down from a $120 billion deficit in October 2012.

A Treasury official said it was unclear whether a partial government shutdown early in the month may have affected the budget numbers.

While hundreds of thousands of federal workers were out of work for sixteen days, they received back pay for those days by the end of the month, the official said.

October marks the first month of fiscal year 2014.

America’s deficit widened sharply during the 2007-09 recession, which hit tax revenues and increased payments for unemployment benefits. But a strengthening economy, tax hikes and cuts to federal spending nearly halved the deficit in fiscal year 2013, leaving it at $680 billion.

The healing of public finances comes as a committee of lawmakers meets for budget talks.

Congress created the panel as part of a deal struck last month to reopen the government and raise a cap on government borrowing. Early signs from the panel have pointed to deadlock over the prospect of further tax hikes.

Few analysts expect a major deal to emerge from the committee.

In October, the government took in $199 billion in revenues, up 8 percent from a year earlier. Federal spending declined 5 percent to $291 billion.

Reporting by Jason Lange; Editing by Andrea Ricci

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