Economy Watch: Federal Deficit Still on Downward Track
The federal government ran a budget deficit of $413 billion for the first six months of fiscal year 2014 (beginning Oct. 1, 2013), the Congressional Budget Office reported.
By Dees Stribling, Contributing Editor
The federal government ran a budget deficit of $413 billion for the first six months of fiscal year 2014 (beginning Oct. 1, 2013), the Congressional Budget Office reported on Monday. The six-month period saw a deficit $187 billion less than the same span last year. All together, revenues were about 10 percent higher than a year ago, while outlays were about 4 percent lower.
For the month of March 2014, the federal government ran a deficit of $36 billion, the CBO estimates—$71 billion less than the $107 billion deficit incurred in March 2013. Because March 1 fell on a weekend this year, certain payments that ordinarily would have been made in March this year were made in February; without that trick of the calendar, the deficit in March 2014 would have been $34 billion smaller than it was in the same month last year.
Even so, the CBO had expected the deficit for March to be around $133 billion. If revenue and spending trends keep going this way, the federal deficit for fiscal 2014 will probably come at less than 3 percent, which is what the CBO is currently predicting.
Delinquent and foreclosed mortgage keep dropping too
Black Knight Financial Services (formerly the LPS Data & Analytics division) reported on Monday that 5.97 percent of U.S. mortgages were delinquent in February, down from 6.27 percent in January, marking the first time since 2008 that the rate is below 6 percent. Delinquency in this case refers to loans that are 30 days late or more, but not actually in foreclosure. An additional 2.22 percent of mortgages were in the foreclosure process in February, down from 3.38 percent in a year earlier, according to Black Knight.
That’s a total of 8.17 percent of mortgages either delinquent or in foreclosure. About 1.749 million loans are more than 30 days past due, but less than 90 days, while 1.242 million loans are more than 90 days past due, but not yet in foreclosure. Some 1.115 million loans are in foreclosure.
Black Knight also reported that mortgage lenders’ tolerance for risk hasn’t gone up much lately, despite the recent improvements in the economy and the housing market. “Credit standards have shown little sign of easing—only about 30 percent of 2013 loans went to borrowers with credit scores below 720—which indicates that significant opportunity to expand mortgage origination activity is available, if risk appetites allow,” Herb Blecher, senior vice president of Black Knight’s data and analytics division, notes.
Wall Street had another down day on Monday, with the Dow Jones Industrial Average losing 166.84 points, or 1.02 percent. The S&P 500 declined 1.08 percent and the Nasdaq fell 1.16 percent.