Yahoo Business Report – 17 October 2009
Posted October 17, 2009on:
US budget deficit hits record $1.4 trillion
WASHINGTON (AFP) – The US government closed its 2009 fiscal year with a record 1.417 trillion dollar budget deficit as it poured resources to contain a serious financial crisis that plunged the nation into recession.
The deficit was some 962 billion dollars higher than the prior year and amounted to 10 percent of US gross domestic product (GDP), the highest since 1945, officials said Friday.
The huge jump in the budget shortfall stemmed from both declining revenues and a massive ramping up of spending in a fiscal stimulus to jolt the world’s largest economy from a prolonged recession following the worst financial crisis in decades.
Receipts for the fiscal year that ended in September totalled 2.105 trillion dollars while outlays were 3.522 trillion dollars, the Treasury said.
Officials, however, pointed out that the deficit was 162 billion dollars lower than the 1.580 trillion dollars forecast by the administration of President Barack Obama, who inherited the flood of red ink from his predecessor George W. Bush.
Bank of America reports 1.0-billion-dollar loss
NEW YORK (AFP) – Despite early signs of a fledgling recovery in the US financial sector, Bank of America Friday highlighted ongoing economic struggles posting a net quarterly loss of 1.0 billion dollars.
Amid hefty writedowns and growing consumer loan problems, the total loss for shareholders in the third quarter was even larger, at 2.24 billion dollars, or 26 cents per share, five cents worse than expected by most analysts.
The news came just after three other major US banks reported healthy third quarter results, suggesting the US financial sector may be slowly recovering from its worst crisis in decades even as the US economy has yet to emerge from recession.
Citigroup, which was drowning in losses in 2008 stemming from the collapse of the US housing bubble and the worldwide financial squeeze, topped expectations, posting a profit of 101 million dollars on Thursday.