WASHINGTON: The federal budget deficit hit an all-time high for the month of December, and the red ink for the first three months of the current budget year is rising at a more rapid pace than last year’s record clip.
The massive tide of red ink, reflecting the continued fallout from a deep recession and a severe financial crisis, highlights the challenge facing President Barack Obama as he pledges to get control of runaway deficits.
The Treasury Department said Wednesday that the deficit last month totaled $91.85 billion, the largest December deficit on record. The figure was in line with economists’ expectations. For the first three months of the current budget year, which began on Oct. 1, the deficit totaled $388.51 billion, 16.8 percent higher than the $332.49 billion imbalance recorded during the same period a year ago.
Last year’s deficit surged to $1.42 trillion, more than three times the record of the previous year, an imbalance of $454.8 billion set in 2008.
The Obama administration is projecting that this year’s deficit will climb even higher to $1.5 trillion, which would be 5.6 percent higher than the 2009 deficit. That figure will be revised when the president sends his new budget to Congress in early February.
Meanwhile, new claims for jobless insurance benefits in the United States rose for the second consecutive week amid persistent labor market concerns even as the economy recovers from recession.
The seasonally adjusted initial claims for unemployment insurance benefits in the week ending Jan. 9 stood at 444,000, an increase of 11,000 from the previous week’s revised figure of 433,000, the Labor Department said.
Most economists had forecast that claims would be around 437,000.
The four-week moving average, a less volatile indicator than the week-to-week figures, however dipped by 9,000 to 440,750 from the previous week’s revised average of 449,750.
The latest data also showed a fall in the total number of Americans receiving unemployment benefits.The number of seasonally adjusted insured unemployment during the week ending Jan. 2 was 4.596 million, a decrease of 211,000 from the preceding week’s revised level of 4.807 million, the department said.
Hopes for a quick US economic rebound were dashed last week when government data showed US employers cut 85,000 jobs in December while the unemployment rate held at 10.0 percent.
More than seven million Americans lost their jobs in the recession and nearly 25 million Americans are unemployed, underemployed because they could not find full time work, or have given up looking for work, latest data showed.
The US economy grew at a 2.2 percent pace in the third quarter, reversing four quarters of contraction.
