The U.S. government rang up a $94.32 billion budget deficit in June, a record for the month, as the price tag for efforts to prop up the economy, banks and automakers mounted while revenues weakened.
The Treasury Department said on Monday that June marked the ninth straight month in which the government had run a deficit. In June 2008, the budget enjoyed a $33.55 billion surplus.
Through the first nine months of fiscal 2009, the government has racked up a $1.086 trillion deficit. That compares with a shortfall of only $285.85 billion in the comparable year-ago period, underscoring the sharp deterioration in the U.S. fiscal picture.
"The Federal deficit is now at a post-World War II high and is likely to continue to rise in the near term as deficits rise and the economy remains weak," said John Silvia, chief economist for Wells Fargo Securities.
"These deficits will influence the allocation of global savings for the foreseeable future. No doubt where this train is going," Silvia said.
The record budget deficit for June was not an all time high. that was February when it was $194 billion, a department official said.
The recession and related government rescue efforts have put the budget on track for its longest-ever stretch of consecutive monthly deficits. The current record is 11 straight months, which has been reached three times.
Some Wall Street economists see the deficit heading higher, some suggesting a $1.5 trillion deficit for fiscal 2009 as the ranks of the jobless grow and hiring remains stubbornly weak as the economy struggles to emerge from recession.
The U.S. economy has been in its longest and deepest recession since at least World War II. Last week an influential panel of economists says the recession will likely end in the third quarter of 2009.
June is a month that traditionally enjoys a surplus not a deficit. The last time there was a deficit for June came in 1991 when as now, the country was in a recession and banks failures mounted.
The difference now is that the U.S. government put forth $700 billion in rescue funds under the moniker the Troubled Asset Relief Program and a $787 billion stimulus package that was designed in part to help put people back to work.
"One of the ways we’re going to make progress on getting this deficit in order is to get this economy moving," said Robert Gibbs, White House spokesman in reaction to the monthly budget statement.
He said the foundation for long-term growth is to create jobs and stabilize the U.S. financial system.
In May, the White House forecast the deficit for the whole of fiscal 2009 at $1.84 trillion compared with $459 billion deficit for fiscal 2008.
In June, receipts totaled $215.36 billion, down from $259.91 billion in June 2008, the 14th straight month in which monthly receipts have been lower than the previous same month for a year ago, a department official said.
Outlays totaled $309.68 billion, a record for June and compared with $226.37 billion in June 2008.
Outlays included $5.4 billion in purchases of mortgage-backed securities from major U.S. mortgage finance sources Fannie Mae and Freddie Mac,which the Treasury has undertaken to help reduce mortgage rates.