(Bloomberg) -- The U.S. posted its largest monthly budget surplus on record in April, which the Congressional Budget Office said reflected stronger economic activity over the past year.
Receipts in April totaled $510 billion, about 12 percent more than the same period last year, while outlays increased by 8.4 percent to $296 billion, the Treasury Department said Thursday in its monthly budget statement. The monthly surplus was $214 billion, the highest in records dating to 1968.
The federal government typically posts a budget surplus in April, when taxpayers face a mid-month deadline to file their returns. A stronger economic expansion and income growth probably added to federal revenue in April, the non-partisan CBO said in a report on May 7.
Government coffers swelled by a record $314 billion via individual tax payments in April. An extra day of collections in the month added about $19 billion to government receipts, Treasury said.
In addition, some wealthy Americans put off paying tax bills last year as they awaited clarity on Republican plans to cut taxes. They may have stepped up payments in April, considering President Donald Trump by then had already signed new tax reform into law, according to Brian Riedl, an economist and senior fellow at the Manhattan Institute, a New York-based research group.
“But really, this is not due to a major economic change,” he said about higher government revenue. “Every April is going to show an even bigger bump just because of inflation and wage growth.”
Overall, the deficit for the first seven months of the fiscal year widened to $385 billion, from $344 billion a year earlier, according to Treasury.
Tax cuts and spending increases approved by Trump are expected to push the budget deficit to $804 billion in the current fiscal year, from $665 billion in fiscal 2017, and then surpass the $1 trillion-mark by 2020, according to the CBO. The White House says the tax cuts will pay for themselves through faster economic growth.
The U.S. has seen a modest increase in wages amid a strengthening labor market. In April, U.S. hiring rebounded and the unemployment rate dropped below 4 percent for the first time since 2000, while wage gains cooled slightly in a sign that the labor market still isn’t tight enough to spur inflation.
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