Today the Department of the Treasury released its July report on Receipts and Outlays of the U.S. Government. In July, outlays exceeded receipts by $27,096 million. This followed a June surplus of $34,101 million. For the fiscal year to date, the deficit was $102,118 million, down from a total of $137,248 million for the same period in the previous fiscal year. Projecting the year-to-date data to 12 months we get an estimated deficit for the 1996 fiscal year of $122,542 million. That would be a reduction of $41,314 million, or 25.2 percent, from the fiscal year 1995 deficit of $163,856 million.

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In other news today, the Labor Department announced that new claims for state unemployment insurance rose by 6,000 in the week ending August 17.

The Labor Department also calculates and reports on a four-week moving average of the weekly claims data (they add up the claims numbers for the past four weeks and divide by four). This smooths out the effects of week-to-week variations, and is a better indicator of the status of unemployment claims. The four-week moving average is one of the eleven indicators that the Department of Commerce uses to construct its Composite Index of Leading Economic Indicators (LEI).

Unemployment claims have been rising in recent weeks; but, because it is calculated based on four weeks of data, the moving average has continued to decline. This changed with today's report. For the first time in five weeks, the moving average rose, edging up by 1,500 from the previous week.

Today's release also reported that the total number of people receiving unemployment benefits in the week ending August 10 was 2.521 million. This was an increase of 55,000 from the preceding week.

All in all, recent reports on unemployment insurance claims seem to be telling us that it is becoming harder for workers to find and keep jobs -- more evidence that economic activity has slowed in recent weeks.

Pat Lafferty (MF Merlin)

Transmitted: 8/22/96