“I think this is a slowing. I don’t think this is ‘we’re falling into an abyss," one economist says.
The White House blames increased spending for the mounting deficit but its own data "suggest falling revenues were a far larger contributor."
"Pressures from rising inequality will exacerbate already material fiscal challenges on the horizon," Moody's warns in a report.
“The job market is booming, impacted by the deficit-financed tax cuts and increases in government spending.”
Economists expect the GOP tax cuts to give a boost to GDP in Q2 but the economy may still fall short of President Trump's 3% target this year.
The U.S. government's rising debt "would have serious negative consequences for the budget and the nation," the CBO warned this week.
"The big picture remains solid, with small firms as optimistic, and inclined to spend and hire, as [much as] they have ever been," the NFIB says.
The gain reflected a surge in confidence among lower-income households that have benefited from the GOP's tax cuts.
The February shortfall is an early indication of the effects of the GOP tax cuts, with withholding taxes falling 2%.
U.S. finance chiefs see earnings growth in 2018, but they also expect higher wage and benefits costs.
The December deficit was the largest since 2008 as robust domestic demand pushed imports to a record high of $256.5 billion.
The Q4 decline follows a 2.7% gain in Q3 but economists believe higher capital spending could lift productivity this year.
