Economy Watch: Federal Deficit Shrinks in Fiscal ’13; GSEs: Mortgage Delinquencies Down; Initial Jobless Claims Dip
- Nov 01, 2013
The U.S. Department of the Treasury said this week that the federal government ran a $75 billion surplus during September, which was the last month of fiscal 2013. Considering the impact of the sequester and the rising revenues produced by a healthier economy, the figure wasn’t a surprise. For fiscal ’13, the federal deficit was 4.1 percent of GDP, compared with 6.8 percent in fiscal ’12.
The budget deficit reached about 10 percent of GDP during the pit of the Great Recession in 2009. A total of roughly 4 percent has much more historical precedent – the deficit was that much or more during most of the 1980s and some of the 1990s. During the late 1990s, there was an annual surplus, and during most of the 2000s, the deficit never quite reached 4 percent of GDP.
The Congressional Budget Office predicts that fiscal 2015 and ’16 will see even smaller deficits, down to roughly 2 percent of GDP by the year after next. Then the deficit will grow again, though fairly slowly, back to about 4 percent of GDP by 2023. That prediction is based on currently policies and projected revenues; 10 years is a long time when it comes to accurately predicting anything involving macroeconomics, especially federal income and spending patterns.
GSEs: Mortgage Delinquencies Down in September
Fannie Mae reported on Thursday the rate of single-family serious delinquency for mortgages tied to the GSE dropped from 2.61 percent in August to 2.55 percent in September. Back in September 2012, Fannie Mae reported that the serious delinquency rate was 3.41 percent.
Earlier in the week, Freddie Mac likewise reported that serious single-family delinquencies were off month over month. In September, the rate was 2.58 percent, compared with 2.64 percent in August. The rate was also down year over year; back in September 2012, Freddie Mac mortgages saw a serious delinquency rate of 3.37 percent.
Serious delinquencies peaked for both Fannie and Freddie in 2009, and have been slowly dropping since then, though neither have reached “normal” (pre-recession) levels of about 1 percent. According to the GSEs, a mortgage is “seriously” delinquent when it’s 90 days or more past due, or actually in foreclosure.
Initial Jobless Claims Down
The U.S. Department of Labor reported on Thursday that for the week ending October 26, initial unemployment claims were 340,000, a drop of 10,000 from the previous week’s figure, which wasn’t revised up or down. The four-week moving average was up 8,000 to 356,250.
Wall Street gyrated quite a bit on Thursday, but ended the day (but not the month) down. The Dow Jones Industrial Average was off 73.01 points, or 0.47 percent, while the S&P 500 and the Nasdaq were down 0.38 percent and 0.28 percent, respectively.