The U.S. budget deficit rose to $88.4 billion in May from $53 billion a year earlier, as government spending in areas, such as Medicaid and defense, rose at a faster pace than revenue.
Receipts from individual and corporate taxes rose 7 percent last month from May 2016 to $240 billion, the Treasury Department said Monday. Meanwhile, spending leapt 19 percent to $329 billion.
Tax revenue is rising, but at a slower pace than in previous years and by less than the Congressional Budget Office has forecast. That partly reflects slower growth in the economy and hiring. With the unemployment rate low, fewer workers are available to take open jobs.
Meanwhile, the deficit has increased to $433 billion in the first eight months of this budget year from $405 billion last year.
Medicaid costs have risen 3 percent, partly because the Obama administration’s Affordable Care Act has brought more people in the program. Defense spending jumped 17 percent in May but has been flat this year.
The government has also spent $35 billion more this year on interest on its debt, a gain of 14 percent, Treasury said. That is mostly because inflation has picked up a bit since last summer, which pushes up interest payments on the government’s inflation-adjusted bonds, known as TIPS.
— Associated Press
General Electric. won approval from U.S. antitrust officials to combine its oil and gas business with Baker Hughes. to create the No. 2 oil field services company in the world.
GE reached a settlement with the Justice Department requiring it to sell its water and process technologies business, according to a court filing Monday in Washington.
The new company will be one of the industry’s largest players, bringing together a portfolio of capabilities spanning oil field services, equipment manufacturing and technology. GE will own 62.5 percent of the merged entity, which will be publicly traded.
Creating a partnership lets GE deepen its bet on oil and prepare for a possible rebound without absorbing all of Baker Hughes, which was the target of a failed acquisition by Halliburton. The new company will leapfrog Halliburton to become the world’s second-largest oilfield-service provider and equipment maker, trailing only Schlumberger Ltd.
Jeffery Immelt, GE’s chief executive , said last month that the deal probably will close by early July. Baker Hughes has scheduled a special shareholders meeting for June 30 in Houston to seek approval of the tie-up.
— Bloomberg News
Jaguar Land Rover announced Monday that it was investing $25 million in Lyft to help the ride-hailing business expand and develop technologies. As part of the investment, Jaguar Land Rover agreed to supply a fleet of its vehicles.
Children’s clothing retailer Gymboree Corp. is filing for Chapter 11 bankruptcy protection. The San Francisco-based company says it is seeking to reduce its debt by $900 million. It expects to operate its business and majority of its 1,300 stores during the restructuring. Gymboree says it secured $35 million in new financing to keep the company operating through the Chapter 11 process.
Smirnoff vodka has a new ad campaign that refers to the investigation into Russian interference in last year’s U.S. presidential campaign. Pictures of bus stop and billboard ads have been posted to social media. The ad reads: “Made in America, but we’d be happy to talk about our ties to Russia under oath.” A spokesman for British company Diageo, which owns Smirnoff, says in a statement the ad is “a wink and a nod to current affairs.” Smirnoff has been made in the United States for decades but its roots go back to Russia.
From news services
8:30 a.m.: Labor Department releases the Producer Price Index for May.
Federal Reserve policymakers begin a two-day meeting to set interest rates.