The numbers: The U.S. recorded a $89 billion budget surplus in August, compared with a deficit of $220 billion in the same month last year, the Treasury Department said Tuesday.
The improvement was due to technical government accounting.
On a longer-run basis, the deficit is getting larger. For the first 11 months of this fiscal year that ends Sept. 30, the deficit widened to $1.5 trillion, up 61% from $946 billion in the same period one year ago.
Key details: Accounting for the White House student loan program played a big role in the improvement in the budget picture in August. The government did not spend $319 billion of funds it had allocated for the program because it was blocked by the Supreme Court. So instead of a wider deficit in August, the government reported a surplus.
Big picture: The Congressional Budget Office forecast Monday that the annual deficit will double this coming year to $2 trillion, excluding the accounting for the student loan plan. Wall Street is starting to get alarmed by the projected path of the budget deficit.
Maya MacGuineas, president of Committee for a Responsible Federal Budget, on Monday said the national debt is on a growth trajectory to hit a new record in six years. She suggested a bipartisan fiscal commission could be in order to bring the gap between revenue and outlays into better balance.
Market reaction: Stocks
DJIA
SPX
were higher on Wednesday. The10-year Treasury note yield
BX:TMUBMUSD10Y
slipped to 4.26%.
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