US Borrowing falls to Lowest Since 2007
The US economy has become stronger and generation of tax revenue has also been boosted. Now, the US Treasury has also claimed that its borrowing needs have gone to the lowest level this quarter since 2007.
As per plans, the US will borrow $192 billion in the July-September period, which is $22 billion more than projected three months ago. The end-of-September cash balance is $150 billion for third quarter, said the Treasury in Washington yesterday. For the next quarter, the Treasury is planning to borrow $187 billion, with $140 billion in cash December 31.
Since 2009, the US has been witnessing decline in budget deficits. The Congressional Budget Office has projected the 2014 gap at 2.8% of gross domestic product. The figure is lesser than what it was on 2009 when President Barack Obama took office.
From April through June, expansion of the US economy was seen a 4% annualized rate, which is more than the median forecast of economists surveyed by Bloomberg.
"Tax receipts continue to be fairly strong, which is helping Treasury to fund outlays without relying as heavily on debt issuance as they had over the past five years", said Thomas Simons, an economist in New York at Jefferies LLC.
As per the Treasury, about $64 billion has been paid in marketable debt in the April-June quarter, lesser than projected $78 billion. At the end of June, the cash balance was $130 billion, which was in line with precious estimate.
More than 200,000 jobs were also added by the economy for sixth consecutive month in July. Manufacturing sector hired at the fastest pace last month in more than three years.
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