US federal deficit likely to remain at current levels in Q4

US Treasury released its monthly federal budget balance statement for October, in which a deficit of $137bn was reported. This is modestly above the consensus expectations of $132bn.

When compared to same period last ear, this year October recorded $14.8bn larger deficit. Total reciepts were at $211bn, dropping 0.8%yoy, while spending increased 3.9% yoy. However, CBO analysis says that this comparision is effected by time-shifting in the October payments.

Calender effects adjusted, deficit for October 2015 shows a $20bn rise. 12 month rolling deficit is $453.7bn with the October data. 

"We expect the federal deficit to remain near these levels, we forecast a fiscal-year deficit of $450bn for both FY 2015 and FY 2016. This, combined with our forecast of nominal GDP growth of 4-5%, should lead the deficit as a share of GDP to fall slightly to 2.4%", says Barclays in a research note.