The U.S. government just notched its highest ever monthly deficit, with the red rink running to an estimated $229 billion in February.
The Congressional Budget Office, in a preliminary analysis, reported that the February 2012 deficit broke last year’s monthly record of $223 billion.
The office attributed the shortfall in part to a decline in revenue — mainly because of a $25 billion increase in income tax refunds thanks to disbursement timing issues.
According to the CBO, processing delays pushed refund payments that would have been distributed in January off into February. And the additional day in February this year allowed for extra refunds to be distributed during the month that otherwise would have been paid out in March.
The CBO projected that for the first five months of the fiscal year, the federal government is running a $578 billion deficit.
The projected deficit this year is once again projected to top $1 trillion.
Yet there also was reason for hope on Thursday. Americans’ wealth rose 2.1 percent to $58.5 trillion in the October-December quarter, the sharpest gain in a year, the Federal Reserve reported Thursday. Still, it would have to rise an additional 13 percent to return to its pre-recession peak.
Driving the gains were stock portfolios, which surged nearly 10 percent in the fourth quarter. And stocks have since risen further. Since early October, the Standard & Poor’s 500 index has jumped 24 percent.
Household wealth, or net worth, reflects the value of assets like homes, bank accounts and stocks, minus debts like mortgages and credit cards. It bottomed during the recession at $49 trillion in the first quarter of 2009. It’s still well below its pre-recession peak of $66 trillion.
The Fed’s quarterly report documents most of the financial transactions that occur in the United States.
Greater net worth tends to boost the economy. When people feel wealthier, they typically spend more. Businesses respond by stepping up plans to hire and expand.