Economy Watch: Budget Deficit Continues Shrinking

By Dees Stribling, Contributing Editor

The U.S. Department of the Treasury, in its latest Monthly Treasury Statement, said that the country ran a $94 billion deficit in July 2014, down from $97 billion during the same month a year earlier. For the fiscal year 2014 through July—10 months, since the FY ends in September—the deficit was $460 billion all together, compared with $607 billion in FY 2013.

The latest Congressional Budget Office estimate for the federal deficit in FY 2014, which was released in April, put it at 2.8 percent of gross domestic product. At the current rate of deficits, that projection could be accurate. The CBO will further revise its deficit projections later this month, however.

Moreover, the CBO expects the deficit to stay below 3 percent for the next five years, assuming there are no changes to the law (which is generally not a safe bet). In any case, the deficit has dropped from about 10 percent of GDP during the worst of the recession to less than 3 percent this year. Only during the demobilization after WWII has a contraction in the deficit been more drastic than that.

Job openings edge up in June

There were 4.67 million U.S. job openings on the last business day of June, up from 4.58 million in May, the Bureau of Labor Statistics reported on Tuesday in its Job Openings and Turnover Summary (JOLTS). That’s the highest level in about 13 years. The number of job openings increased for more than half of the industries the BLS tracks, but decreased for retail trade.

There were 4.5 million total separations in June, not much changed from May, the BLS also reported. The total number of separations was unchanged for both private employers and in government. By the BLS’ reckoning, separations include quits, layoffs and discharges and other separations. Total separations are referred to as turnover.

Quits are generally voluntary separations initiated by the employee, meaning that the quits rate is an indirect measure of the health of the employment market, since it’s a measurement of workers’ willingness or ability to leave jobs. Quits didn’t change much overall in June, but the number of quits has increased year-over-year in retailing, education, health care, and accommodation and food services.

Small businesses a little more optimistic

The National Federation of Independent Business said on Tuesday that its Optimism Index rose 0.7 points to 95.7. There was little change in the 10 components of the index other than outlook for expansion and business conditions, which together accounted for the small gain.

Wall Street edged down on Tuesday, with the Dow Jones Industrial Average losing 9.44 points, or 0.06 percent. The S&P 500 was off 0.16 percent and the Nasdaq was down 0.27 percent.