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business Saturday 17 OctOber 2020
Awash in red ink: US posts record $3.1T 2020 budget deficit

By MARTIN CRUTSINGER AP ment receipts of $1.61 tril-
Economics Writer lion were $286 billion lower
WASHINGTON (AP) — The than the administration
federal budget deficit hit had projected in February.
an all-time high of $3.1 tril- That reflected a drop of
lion in the 2020 budget $203 billion in individual in-
year, more than double come taxes from the Febru-
the previous record, as ary forecast and a decline
the coronavirus pandemic of $51.8 billion in corporate
shrank revenues and sent income taxes from the Feb-
spending soaring. ruary projection.
The Trump administration The $6.55 trillion in spending
reported Friday that the — $1.76 trillion higher than
deficit for the budget year the administration's Febru-
that ended on Sept. 30 was ary estimate — includes the
three times the size of last coronavirus relief programs
year's deficit of $984 billion. passed by Congress, such
It was also $2 trillion higher as individual economic im-
than the administration pact payments of $1,200,
had estimated in February, expanded weekly unem-
before the pandemic hit. ployment benefits of $600
It was the government's per week and the Pay-
largest annual shortfall in In this Sept. 1, 2020 file photo, Treasury Secretary Steven Mnuchin testifies before the House Select check Protection Program
dollar terms, surpassing the Subcommittee on the Coronavirus Crisis, during a hybrid hearing on Capitol Hill in Washington. to provide support to small
Associated Press
previous record of $1.4 tril- businesses.
lion set in 2009. At that time, budget year shows that crats, who warn that with- crats on a new relief pack- Despite all the borrowing
the Obama administration revenues fell by 1.2% to out significant support the age but Senate Republi- required to finance the
was spending heavily to $3.42 trillion, while govern- country could be facing a cans have indicated they surging deficit, interest pay-
shore up the nation's bank- ment spending surged double-dip recession. don't support the spending ments on the debt actually
ing system and limit the 47.3% to $6.55 trillion. That While about half of the 22 levels being put forward by came in $53.8 billion below
economic damage from spending reflects the relief million jobs lost in March Democrats. the administration's Febru-
the 2008 financial crisis. programs Congress passed and April have been re- "The administration remains ary projection. That was
The 2020 deficit, in terms in the spring to support covered, the concern is fully committed to support- due to interest rates being
of its relationship to the the economy as millions of that without more govern- ing American workers, fam- lower than expected this
economy, represented Americans were losing their ment support, those still ilies and businesses and to year because of the reces-
15.2% of total gross do- jobs. without work will be unable ensuring that our robust re- sion that began in Febru-
mestic product, the sum of Many of the benefit pro- to make their rent or mort- bound continues," Treasury ary. The low interest rates
all the goods and services grams expired in late July gage payments and buy Secretary Steven Mnuchin are a key reason econo-
produced by the country. or early August, and so far food. In addition to the hu- said in a statement re- mists are not as concerned
That was the highest level Democrats and Republi- man toll, the result would leased with the budget re- about the rising debt bur-
since 1945, when the U.S. cans have been unable to be a significant drag on port. den caused by the deficit.
was borrowing heavily to agree on legislation to re- U.S. economic growth. The joint report from Trea- The federal deficit is ap-
finance World War II. instate them. Republicans President Donald Trump sury and the Office of proaching 100% of GDP
The administration's final have balked at the level of has said he is willing to Management and Budget and is projected to top that
accounting of the 2020 spending sought by Demo- compromise with Demo- showed that total govern- amount in 2021.q

U.S. retail sales grow for 5th month in a row

By JOSEPH PISANI erything in sight, especially health.
AP Retail Writer clothing." Retail sales have been re-
NEW YORK (AP) — Retail Sales at clothing stores covering since plunging
sales rose strongly in Sep- rose 11%, accounting for in the spring as stores and
tember, the fifth straight much of September's over- malls were ordered closed
month of growth, as Ameri- all growth. Even sales at to help prevent the spread
cans spent more on cloth- department stores, which of the coronavirus. And
ing, cars and sporting have been falling out of spending has continued
goods. fashion with shoppers for even after more than 20
U.S. retail sales jumped 1.9% years, rose 9.7% last month. million unemployed Ameri-
last month, the U.S. Com- At auto dealerships and cans lost a $600 boost in
merce Department said Fri- auto part shops, sales were their weekly unemploy-
day. That's more than dou- up 3.6%. And those look- ment checks at the end of
ble what was economists ing to go camping or buy July.
were expected. And it's up exercise equipment for Friday's retail sales report Passers-by examine a storefront window, Tuesday, Sept. 15,
from the 0.6% increase in their homes sent sales at covers only about a third 2020, in Boston's fashionable Newbury Street shopping district.
August. sporting goods stores 5.7% of overall consumer spend- Associated Press
"Americans raced to the higher. ing. Services such as hair- Whether people will keep for out-of-work Americans
stores in September," said Consumer spending makes cuts and hotel stays are not shopping remains to be are needed to sustain
BMO Capital Markets ana- up two-thirds of all U.S. included in the report. All seen. The unemployment spending. And some say ris-
lyst Sal Guatieri, in a note to economic activity, and is of those types of businesses rate is still high, at 7.8% last ing COVID-19 cases could
investors, adding that they watched closely to gauge have been badly hurt by month. Some economists keep people away from
were "buying just about ev- the country's economic the pandemic. say more federal checks stores. q