Fiscal ’14 budget deficit dips 37%

WASHINGTON - The U.S. budget deficit narrowed by 37 percent in the first four months of the fiscal year compared with a year earlier as spending declined and a stronger economy helped increase revenue.

Outlays exceeded receipts by $184 billion from October through January compared with a $290.4 billion shortfall in the same period a year earlier, the Treasury Department said Wednesday in Washington. Last month’s deficit was $10.4 billion, compared with a $2.9 billion surplus in January 2013.

The nation’s deficit as a share of the economy is expected to shrink to a seven-year low in the 12 months ending Sept. 30, according to projections earlier this month by the Congressional Budget Office, which predicted a $10 billion deficit for January. An unemployment rate that fell to 6.6 percent last month from 7.9 percent a year earlier is helping boost government revenue and contain spending.

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“With stronger receipts and lower outlays, it’s a more positive picture of the U.S. fiscal situation,” said Gennadiy Goldberg, a U.S. strategist at TD Securities USA LLC in New York.

Revenue rose 8.2 percent from October through January to $961 billion from the same period a year earlier, while outlays dropped 2.8 percent to $1.145 trillion in the fiscal year to date.

Commerce Department figures last month showed the U.S. economy expanded at a 3.2 percent pace in the fourth quarter as Americans’ spending climbed the most in three years, laying the groundwork for further improvement in 2014.

In January, receipts gained 8.7 percent to $296 billion, while spending expanded by 13.8 percent to $306.4 billion from a year earlier.

Feb. 1 this year fell on a Saturday, requiring some government payments to be made in January instead of this month.

The Congressional Budget Office said Feb. 4 that the fiscal 2014 deficit will narrow to $514 billion, or 3 percent of gross domestic product, from $680 billion last year. The projected gap is down from 9.8 percent of GDP in 2009,the widest in records dating back to 1974.

Information for this article was contributed by Michael C. Bender and Laura Litvan of Bloomberg News.