US government posts a large budget surplus

City A.M. Reporter
THE US government posted an unexpectedly large budget surplus in June, a further sign of the rapid improvement in public finances that has taken the heat off Congress to find savings and raise the nation’s borrowing limit.

Rising tax revenue, public spending cuts and big payments to the Treasury from government-backed mortgage companies helped the government take in $117bn more last month than it paid out, the US Treasury said yesterday.

Analysts polled by Reuters had expected a surplus of $39.5bn.

June’s surplus was the largest on record for that month.

While the government is still $510bn in the red with three months to go in the fiscal year, June’s big surplus will buy it time before it runs up against the limit on borrowing set by Congress. Analysts said yesterday they expect the Treasury to hit the debt ceiling by early November.

Rising incomes and tax increases enacted earlier in the year helped cause government receipts to rise to $287bn in June, up 10 per cent from a year earlier.

While economic growth has been lacklustre in the first half of 2013, job growth has been more steady.