U.S. government deficit down 17% from same period a year ago

Treasury Secretary Janet Yellen speaks during a meeting with President Joe Biden and business leaders about the debt limit in the South Court Auditorium on the White House campus, Wednesday, Oct. 6, 2021, in Washington. The U.S. budget deficit totaled $356.4 billion in the first two months of the budget year, down 17% from the same period a year ago as a sharp jump in government revenues offset a smaller increase in spending. In its monthly budget report, the Treasury Department said Friday, Dec. 10, that the government's deficit in October and November was $72.9 billion below the deficit in the same two months last year. The government's budget year starts on Oct. 1..(AP Photo/Evan Vucci, File)

WASHINGTON (AP) — The U.S. budget deficit totaled $356.4 billion in the first two months of the budget year, down 17% from the same period a year ago thanks to a sharp jump in government revenues that offset a smaller increase in spending.

In its monthly budget report, the Treasury Department said Friday that the government's deficit in October and November was $72.9 billion below the deficit in the same two months last year. The government's budget year starts on Oct. 1.

The improvement was due to government revenues rising at a faster pace than spending over the past two months.

For the October-November period, tax revenues totaled $565.1 billion, 23.6% above revenues in the same period last year and a record for the first two months of the budget year.

The big increase reflected an improving economy that has seen corporate profits rise and millions of people going back to work, which boosts individual tax payments. In addition, businesses are having to make up for their portion of Social Security tax payments that were deferred last year as part of the tax relief Congress granted during the pandemic-triggered recession.

Government spending totaled $921.5 billion, also a record for the first two months of the budget year, and 3.9% higher than the same two months last year.

The budget deficit totaled $2.77 trillion for the 2021 budget year that ended Sept. 30. That was the second highest annual deficit on record, exceeded only by the $3.13 trillion deficit for 2020.

The deficits for both years were inflated by the trillions of dollars in government spending approved by Congress to keep the country from sliding into a deeper downturn because of the COVID shutdowns.

The Congressional Budget Office is forecasting that the deficit for the current 2022 budget year will narrow further to $1.2 trillion. CBO projects the annual deficits will remain below $1 trillion until 2026 when they will once again top the $1 trillion mark.

Nancy Vanden Houten, senior economist at Oxford Economics, said she is forecasting a deficit for this fiscal year of $1.33 trillion. That assumes that in addition to the infrastructure bill of around $1 trillion that Congress has already passed, lawmakers will end up passing a social welfare and climate measure of around $1.8 trillion. The price tag for both measures covers 10 years.

For the month of November, the Treasury report said the deficit totaled $191.3 billion, a record for the month of November.

Large-cap stocks are foundational elements of every portfolio. These steady performers may not excite growth investors in the midst of a bull market. However, in periods of volatility, large-cap stocks act as a port in the storm.

Large-cap stocks offer investors some important benefits. First, by definition large-cap stocks are companies that have a market capitalization of $10 billion or more. This is an indication that the company has a mature business that carries less risk of having a significant downturn in business during economic downturns.

Second, large-cap stocks frequently pay dividends. These dividends offset the relatively slower growth in the company’s stock price and can lead to an impressive comprehensive total return. In several cases these companies have increased their dividends over a long period of time making them members of the Dividend Aristocrats or Dividend Kings club.

Large-cap stocks also give investors access to a significant amount of financial data. This makes it easy for investors to conduct their due diligence and understand how profitable an investment is likely to be.

In this special presentation, we’re giving you a look at seven large-cap stocks that have a bullish outlook at a time when the market is likely to remain volatile.