by Calculated Risk on 3/13/2013 08:23:00 PM

On the declining deficit from MarketWatch: February budget deficit $203.5 billion: Treasury

The U.S. government ran a budget deficit of $203.5 billion in February, down 12% from the same month last year, the Treasury Department reported on Wednesday. The narrowing of the gap between spending and revenue in February is further indication that the deficit is on track to improve this fiscal year which ends Sept. 30. If lawmakers hold fiscal policy steady, the deficit for this year will total $845 billion, about $240 billion less than the fiscal 2012 deficit and the first deficit below a trillion since fiscal 2008, according to the Congressional Budget Office projections.

The Congressional Budget Office (CBO) is projecting the deficit will decline to $845 billion in fiscal 2013 (the current budget year), and that the deficit will be about 5.3% of GDP.

Click on graph for larger image.

This graph shows the actual (purple) budget deficit each year as a percent of GDP, and an estimate for the next ten years based on estimates from the CBO.

The CBO projects the deficit will decline to 3.7% of GDP in fiscal 2014, and 2.4% of GDP in fiscal 2015. After 2015, the deficit will start to increase again according to the CBO.

Thursday economic releases:
• At 8:30 AM, The initial weekly unemployment claims report will be released. The consensus is for claims to increase to 350 thousand from 340 thousand last week.

• Also at 8:30 AM, the Producer Price Index for February. The consensus is for a 0.6% increase in producer prices (0.1% increase in core).